A Company with $70,000 in Current Assets and $50,000 in Current

question 113

Multiple Choice

A company with $70,000 in current assets and $50,000 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:

Ballast Resistor

A passive electronic component used to limit the amount of current in an electrical circuit.

DC Motor

An electric motor that runs on direct current (DC) electricity, used in many applications for its simplicity and controllability.

Conductors

Materials or objects that allow the flow of electrical current through them.

Magnetic Fields

Invisible fields produced by electrically charged objects affecting the behavior of other charged or magnetic objects in the vicinity.