Ed's Drive-In Had $175,000 of Current Assets and $80,000 of Current

question 148

Multiple Choice

Ed's Drive-In had $175,000 of current assets and $80,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on Ed's Drive-In's current ratio?

• A) The ratio remained unchanged.
• B) The change in the current ratio cannot be determined.
• C) The ratio decreased.
• D) The ratio increased.

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Definitions:

Radical Labor

A movement or approach within labor advocating for deep structural changes to the economic and social system, often focusing on workers' rights and class struggle.

Anticommunist Repression

Measures undertaken by governments or organizations to suppress or eliminate communist ideology and movements.

League of Nations

An international organization established after World War I under the Treaty of Versailles in 1919, intended to ensure world peace but was ultimately unable to prevent World War II.

Treaty of Versailles

The 1919 treaty that ended World War I, imposing heavy reparations and territorial losses on Germany, and reshaping the map of Europe.