Which of the following could explain a decrease in the quick ratio?
A) A change from FIFO to LIFO
B) A change in the depreciation method used
C) Slow-moving inventory
D) Increase in accounts payable

Question

Quizplus · Accepted Answer

The quick ratio is calculated as (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities. An increase in accounts payable increases the denominator, potentially decreasing the quick ratio. The other options do not directly affect the quick ratio's components.

Which of the Following Could Explain a Decrease in the Quick