current ratio

jfi01 · #1 Nov 9, 2006, 06:05 PM

What effect, if any, does a payment received in full (receivable) is there on current ratio? -increase, decrease, or no effect - why???

Any help would be greatly appreciated!!

CaptainForest · Nov 10, 2006, 07:33 PM

No effect.

The JE to record it would be:
Dr. Cash 100
Cr. AR 100

Therefore, there is NO change in current assets. No change in current liabilities and therefore, no change in the current ratio.



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