A Company with $60,000 in Current Assets and $40,000 in Current

question 27

Multiple Choice

A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability.As a result of this transaction, the current ratio and working capital will:

• A) remain the same and decrease, respectively.
• B) increase and remain the same, respectively.
• C) both increase.
• D) both decrease.

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Definitions:

Utilitarianism

A theory in normative ethics holding that the best action is the one that maximizes utility, often defined as maximizing happiness and reducing suffering.

Greatest Good

A concept often associated with utilitarianism, suggesting that actions are right if they benefit the majority, promoting the most happiness or least harm.

Laws

The system of rules that are created and enforced through social or governmental institutions to regulate behavior and maintain order in society.

Monroe Doctrine

A principle of United States foreign policy established in 1823, asserting that any intervention by external powers in the politics of the Americas is a potentially hostile act against the US.