If a Company Has an Acid-Test Ratio of 1 $\quad$ Collection of Receivable
A

If a company has an acid-test ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio? Short-term Borrowing $\quad$ Collection of Receivable
a. $\quad$$\quad$ Increase $\quad$$\quad$$\quad$ No effect
b. $\quad$$\quad$ Increase $\quad$$\quad$$\quad$ Increase
c. $\quad$$\quad$ Decrease $\quad$$\quad$$\quad$ No effect
d $\quad$$\quad$ Decrease $\quad$$\quad$$\quad$ Decrease