The Following Information Concerning the Current Assets and Current Liabilities

question 50

Essay

The following information concerning the current assets and current liabilities of
Mason Company at December 31, 2010, is presented below.
Based on this information, how would the current ratio be affected if Mason collects the accounts receivable and then uses some of the cash to pay off the accounts payable?
a. The current ratio would increase from 1.30 to 1.93.
b. The current ratio would increase from 0.74 to 4.02.
c. The current ratio would decrease from 1.30 to 0.62.
d. The current ratio would increase from 1.09 to 1.61.

---

Definitions:

Electric Shock

A sudden discharge of electricity through a part of the body, causing injury or psychological trauma.

Compulsive Hand Washing

An obsessive-compulsive behavior characterized by frequent and excessive washing of hands, often driven by irrational fears of contamination.

Reinforcement

In psychology, a process by which a behavior is strengthened or increased in frequency by its consequences.

Anxiety

A psychiatric condition marked by intense anxiety, worry, or dread, severe enough to disrupt daily life functions.