A Client Has Settled His Outstanding Credit Account with Your

question 44

Multiple Choice

A client has settled his outstanding credit account with your company; at the same time,you have just received cash for inventory that you sold at cost.What is the overall impact of these concurrent changes on the current ratio?

• A)There is no impact.
• B)The inflow of cash caused the current ratio to rise.
• C)Depends on the actual dollar amounts.
• D)None of the choices are correct.

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Definitions:

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Myra Bluebond-Langner

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