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

question 122

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

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Definitions:

Revenue-Raising

The process of generating income for a government or organization, often through taxes or fees.

Licensing Law

Legal regulations governing the process and requirements for granting permissions to individuals or entities to conduct activities that are subject to regulation.

Educational Requirements

Refers to the specific levels of education or particular qualifications necessary for a job position, professional certification, or other formal achievement.

Geographic Restraint

A limitation or restriction on where a person can live or work, often found in employment contracts or legal judgments.