If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable on account will cause the ratio to decrease.

Name: If a firm has a current ratio of 2, the subsequent receipt of a 60-day note receivable on account will cause the ratio to decrease.
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Quizplus · Accepted Answer

The subsequent receipt of a 60-day note receivable on account will increase both the current assets and the total assets of the firm, but will not affect its current liabilities. Therefore, the current ratio will increase, not decrease.

If a Firm Has a Current Ratio of 2, the Subsequent