Which of the following transactions increases both the quick ratio and the current ratio 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 increases current assets without affecting current liabilities, thus increasing both the quick ratio and the current ratio.

Which of the Following Transactions Increases Both the Quick Ratio