Which of the Following Ratios Increases When Cash Is Collected

question 65

Multiple Choice

Which of the following ratios increases when cash is collected on an account receivable?

• A)Current.
• B)Quick.
• C)Return on assets.
• D)Receivable turnover ratio.

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Definitions:

Equipment

Tangible property used in the operations of a business, not intended for sale, with a useful life extending beyond a year.

Asset Account

An account that records the value of economic resources owned by an entity, which are expected to provide future benefits.

Cash Account

A cash account is a financial account that records cash transactions, including cash receipts and payments, managing the flow of liquid assets.

Journal Entry

A record in accounting that represents a transaction and its effect on various accounts, ensuring the debits and credits balance.