If a company has a current ratio of 1.5:1, what effects will the borrowing of cash by long-term debt and collection of accounts receivable have on the ratio? O Decrease and decrease Decrease and no effect Increase and increase Increase and no effect

If a company has a current ratio of 1.5:1, what effects will the borrowing of cash by long-term debt and collection of accounts receivable have on the ratio? O Decrease and decrease Decrease and no effect Increase and increase Increase and no effect

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 13MC: What information can best be elicited from a receivable ratio? A. company performance with current...

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Concept explainers

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

If a company has a current ratio of 1.5:1, what effects will the borrowing of cash by
long-term debt and collection of accounts receivable have on the ratio?
Decrease and decrease
) Decrease and no effect
Increase and increase
Increase and no effect

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Accounting for Cash and cash equivalents

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