Which of the following transactions does not affect the quick ratio? - 4543

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Which of the following transactions does not affect the quick ratio?

a.Land held for investment is sold for cash.

b.Equipment is purchased and is financed by a long-term debt issue.

c.Inventories are sold for cash.

d.Inventories are sold on a credit basis.

The quick ratio is a test of how much coverage, a firms current assets gives over its current liabilities. The relationship is expressed as Current Assets/Current Liabilities. Inventories and cash are part of current assets. Any changes would affect the ratio.

 
Solution Description

       Which of the following transactions does not affect the quick ratio?