What is the effect of the collection of accounts receivable on the current ratio and net working capital,respectively? Current Ratio Net Working Capital
A) No effect No effect
B) Increase Increase
C) Increase No effect
D) No effect Increase

Question

Quizplus · Accepted Answer

The collection of accounts receivable converts receivables into cash, which does not change the total current assets or current liabilities, thus having no effect on the current ratio or net working capital.

What Is the Effect of the Collection of Accounts Receivable