Which of the following actions will cause an increase in the quick ratio in the short run?

Question

Quizplus · Accepted Answer

A) When R1,000 worth of inventory is sold and an account receivable is created, the quick ratio increases because the cash balance increases while the current assets decrease by only the value of the inventory sold, and not the full amount of the sale.
B) When a subsidiary is sold for cash, it increases the cash balance, which increases the quick ratio.
C) Selling marketable securities at cost does not affect the current ratio or quick ratio as marketable securities are already included in the calculation. 
Therefore, options A and B will increase the quick ratio in the short run, while option C will have no effect. Hence, the best choice is E, which includes options A and B.

Which of the Following Actions Will Cause an Increase in the Quick