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A company sells inventory for cash to a customer at a selling price which is below the cost of inventory items.
How will these transaction affect current ratio and quick ratio immediately after the transaction?
Do it increase or decreasePresumably you found this question in a book, in which case you must have an answer in the same book!!
Current ratio decreases and quick ratio increases.
Make up some figures yourself and see what happens 🙂
Because if they have sold inventory then cash or receivables will increase.
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