Reducing owner's drawings preserves business cash as a current asset Steps: - Define current ratio as current assets (CA) divided by current liabilities (CL). - To improve it (assuming ratio >1), increase CA without raising CL or decrease CL without lowering CA by the same or more. - Evaluate each option's impact on CA and CL. - Select the option that raises CA with no CL change. Why D is correct: - Drawings reduce cash (a current asset) and owner's equity; reducing them retains more cash in CA per the accounting equation (Assets = Liabilities + Equity), with no effect on CL, increasing the ratio. Why the others are wrong: - A: Delaying payments keeps CL (payables) higher than if paid, preventing the ratio increase from reducing both CA and CL equally (since (CA - x)/(CL - x) > CA/CL when CA/CL >1). - B: Prompt customer payments convert accounts receivable to cash; both are CA, so total CA and CL unchanged, ratio unaffected. - C: Credit purchases add equally to inventory (CA) and payables (CL), lowering the ratio when …