A Company Issues $200,000 in Long-Term Bonds and Pays Off

question 70

Multiple Choice

A company issues $200,000 in long-term bonds and pays off $200,000 in accounts payable. Which of the following statements is true?

• A) Both the quick ratio and times interest earned ratio will rise.
• B) The quick ratio will fall but the times interest earned ratio will rise.
• C) The quick ratio will rise but the times interest earned ratio will fall.
• D) Both the quick ratio and times interest earned ratio will fall.

Understand and apply principles of inclusive and non-biased communication.

Recognize and utilize specific and clear language in business writing.

Distinguish between connotative and denotative meanings of words.

Identify and avoid ethnically and racially biased language.

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Definitions:

Items

Objects, articles, or goods that are considered or listed typically in an inventory, agenda, or collection.

Autos

Vehicles propelled by their own engines or motors, primarily used for transportation.

Trucks

Large, heavy motor vehicles designed for transporting goods or performing other specific tasks.

Purchase

The act of buying goods or services.