Assuming a current ratio of 1.2 and an acid-test ratio of 0.80, how will an increase in accounts receivable affect each ratio?

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Assuming a current ratio of 1.2 and an acid-test ratio of 0.80, how will an increase in accounts receivable affect each ratio?

A) No change to the current ratio and decrease the acid-test ratio.

B) Increase the current ratio and increase the acid-test ratio.

C) Decrease the current ratio and decrease the acid-test ratio.

D) Decrease the current ratio and increase the acid-test ratio.

Answer: B

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