Sheena Company Has Current Assets, Current Liabilities, and Long-Term Liabilities

question 41

Multiple Choice

Sheena Company has current assets, current liabilities, and long-term liabilities of $20,000, $13,000, and $17,000, respectively. Within these amounts, $2,000 is accounts payable, and $3,500 is accounts receivable. If $2,000 of cash were used to pay off the accounts payable, what effect would this have on the current ratio?

• A)The current ratio would increase by approximately 0.10.
• B)The current ratio would decrease by approximately 0.10.
• C)The current ratio would decrease by approximately 0.03.
• D)There would be no change in the current ratio.

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Definitions:

Neurotransmitter

Chemical substances in the brain that transmit signals from one neuron to another, playing a major role in shaping everyday functions and mood.

Excitatory

Referring to substances or signals that increase the activity of the brain or other body systems, potentially leading to heightened arousal or action.

GABA

GABA (gamma-aminobutyric acid) is the main inhibitory neurotransmitter in the nervous system, playing a critical role in reducing neuronal excitability and regulating muscle tone.

Glutamate

An amino acid that acts as a neurotransmitter in the central nervous system.