Spring Company sold an item of inventory to a customer at a price resulting in gross...
Spring Company sold an item of inventory to a customer at a price resulting in gross profit to Spring. Which of the following statements is true regarding the effect of this transaction on the company’s current ratio and quick ratio in 2020?
A. The current ratio increases and the quick ratio stays the same.
B. The current ratio stays the same and the quick ratio increases.
C. Both the current ratio and the quick ratio stay the same.
D. Both the current ratio and the quick ratio increase.
Homework Answers
D. Both the current ratio and the quick ratio increase.
Explanation:- (With Example)
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