A Company with $60,000 in Current Assets and $35,000 in Current

question 271

Multiple Choice

A company with $60,000 in current assets and $35,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

• A) both decrease.
• B) both increase.
• C) increase and remain the same, respectively.
• D) remain the same and decrease, respectively.

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Definitions:

Electro-Mechanical Switch

A switch that combines mechanical operation with electrical activation to control circuits, often found in appliances and machinery.

Smart Switch

A device or component that uses digital technology or intelligence to perform its function, often capable of remote or automated operation.

Halogen Lamps

Light bulbs that contain a small amount of a halogen such as iodine or bromine, which increases their efficiency and lifespan.

Incandescent Bulbs

Light bulbs that produce light by heating a filament wire to a high temperature until it glows, known for their warm light but low efficiency.