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.