A Company Paid Off a $100,000 2-Year Note Payable

question 33

Multiple Choice

A company paid off a $100,000 2-year note payable. The effect of this transaction is that the

• A)current ratio decreased.
• B)earnings per share increased.
• C)working capital increased.
• D)debt-to-equity ratio increased.

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Definitions:

Budget Equation

An equation that represents the relationship between income, savings, and expenses.

Leisure

Time that an individual can spend at their discretion rather than working, often used in economic models to discuss trade-offs between work and free time.

Nonlabor Income

Income received that is not earned from direct labor or employment, such as dividends, interest, or rental income.

Wage Rate

The amount of money paid to employees for their work or services, often expressed per hour or year.