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jfi01
Nov 9, 2006, 08:05 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, 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.