Ott Company has current assets of $400,000 and current liabilities of $500,000. Ott Company's current ratio will be increased by ?

A. The purchase of $100,000 of inventory on account. 

since the current ratio were .8 (less than1) hence  an equal increase in the denominator and numerator will finally  lead to and increase in the current ratio (math).

The answer is A. Purchase of100000 worth of inventory on account. This will lead to increase of current ratio.

Answer A is the right answer because the percentage less than one .

Take a long term loan because taking short term or buying inventory account increase current liability

Current Asset will increase i.e. current ratio increase due to refinancing of long term loan.

the answer is A, the purchase of $100000 of inventory on account

Answer A is correct answer

C. The collection of $100,000 of accounts receivable.

A is correct answer.When inventory are purchased on the aacount it means that the current ratio will improve from0.8:1 to1:1 that's revealed that the company now is able to meet it's maturing obligation compared to the position before.The good ratio is said to be2:1 that for every one usd of current liability there is2usd of current asset to pay which healthier than the ratio of0.8:1 or1:1.The other transactions they don't improve the current ratio some of them increase and reduce same current asset composition and hence render no effect while some of them they reduce both current assets and current liabilities with the same amount hence pose no effect on the the current ratio and also some decrease current asset by paying long term debt which is not current liability therefore continue to decrease the currrent ratio.

The answer is option A :).....

 

C only

 

A if inventory value appreciates immediately after purchase and is revalued