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galina1969 [7]
3 years ago
5

Assuming a current ratio of 1.2 and an acid-test ratio of 0.80, how will an increase in accounts receivable affect each ratio

Business
1 answer:
Law Incorporation [45]3 years ago
3 0

Answer:

Increased

Explanation:

The current ratio is calculated by dividing the current assets with the current liabilities. As the receivable is known as a current asset, the increase in receivable will no doubt increase the current asset, and as we all know when the numerator increases the final result also increases. The same case in quick ratio as the receivable increase the numerator will also increase and due to that the final result will also be increased.

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