A company's current ratio and acid-test ratios are both greater than 1.The collection of a current accounts receivable of $29,000 would:
A)increase the current ratio.
B)decrease the current ratio.
C)not affect the current ratio or the acid-test ratio.
D)decrease the acid-test ratio.

Question

Quizplus · Accepted Answer

There would be no change in the current ratio or the acid-test ratio as the collection of an account receivable is exchanging one current asset for another current asset.

A Company's Current Ratio and Acid-Test Ratios Are Both Greater