Baden Company Had $375,000 of Current Assets and $150,000 of Current

question 32

Multiple Choice

Baden Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $75,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on Baden Company'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:

Standard Error

A statistical metric that measures the accuracy with which a sample distribution represents a population, calculated as the standard deviation of the sampling distribution.

Margin of Error

An expression of the amount of random sampling error in a survey's results, indicating a range within which the true population parameter is likely to lie.

Confidence Interval

A collection of values, derived from the analysis of sample data, that is expected to cover the value of an unknown population quality.

Standard Error

A measure of the accuracy with which a sample distribution represents a population by using the standard deviation of the sample.