Question

What is the effect on the Quick Ratio when a company

Q: Answer-What is the effect on the Quick Ratio when a company successfully collects cash from its trade recei...

Both cash and debtors are part of Quick assets. The collection of cash from receivables shifts the composition of quick assets without changing the total amount, thus not affecting the Quick Ratio.

successfully collects cash from its trade receivables?

A It will lead to an increase in quick ratio

B It will decrease the quick ratio

C There's a slight decline in the ratio.

D The ratio remains unaffected.

E The ratio experiences a temporary increase.

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PNB SO Credit Officer Scale 1

What is the effect on the Quick Ratio when a company

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