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    jfi01's Avatar
    jfi01 Posts: 1, Reputation: 1
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    #1

    Nov 9, 2006, 08:05 PM
    Current ratio
    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's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Nov 10, 2006, 09:33 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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