Which of the following transactions increases both the quick and current ratios assuming that both ratios are greater than 1?
A) Collecting an account receivable.
B) Purchasing inventory on account.
C)Accruing revenue earned at year-end.
D)Selling inventory on account at the cost of the inventory.

Question

Quizplus · Accepted Answer

Accruing revenue earned at year-end increases current assets without affecting current liabilities, thus increasing both the quick and current ratios.

Which of the Following Transactions Increases Both the Quick and Current