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    Question

    A company delays invoice recording to push receivables

    lower at quarter-end, improving the current and quick ratios temporarily. What’s the long-term impact?
    A Increased quick ratio permanently Correct Answer Incorrect Answer
    B Better profit margin Correct Answer Incorrect Answer
    C No effect except end-of-period appearance Correct Answer Incorrect Answer
    D Reduced inventory Correct Answer Incorrect Answer
    E Improved earnings quality Correct Answer Incorrect Answer

    Solution

    Such manipulation—window dressing—improves ratios only temporarily at reporting dates; underlying liquidity remains unchanged.

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