A Company Has a Current Ratio of 2

question 142

Multiple Choice

A company has a current ratio of 2.0 and a quick ratio of 1.5.Assume the company then paid previously declared dividends in the amount of $20,000.Which of the following statements is true?

• A)The current ratio will decrease and the quick ratio will decrease.
• B)The current ratio will decrease and the quick ratio will not change.
• C)The current ratio and the quick ratio will not change.
• D)The current ratio will increase and the quick ratio will increase.

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Definitions:

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