Which of the following transactions will increase the earnings quality ratio?
A)Paying cash to suppliers.
B)Accruing sales revenue.
C)Selling treasury stock for more than its cost.
D)Collecting an account receivable.

Question

Quizplus · Accepted Answer

Collecting an account receivable increases the earnings quality ratio as it indicates an increase in cash inflow and strengthens the company's ability to generate earnings.

Which of the Following Transactions Will Increase the Earnings Quality