During the Current Year,a Company Issues $200,000 in Long-Term Bonds

question 139

Multiple Choice

During the current year,a company issues $200,000 in long-term bonds and pays off $200,000 in accounts payable.Which of the following statements is true regarding the company's year-end ratios?

• A)Both the quick ratio and times interest earned ratio will rise.
• B)The quick ratio will fall but the times interest earned ratio will rise.
• C)The quick ratio will rise but the times interest earned ratio will fall.
• D)Both the quick ratio and times interest earned ratio will fall.