A Firm Has $600,000 in Current Assets and $150,000 in Current

question 56

Multiple Choice

A firm has $600,000 in current assets and $150,000 in current liabilities.Which of the following is correct if it uses cash to pay off $50,000 in accounts payable?

• A)current ratio will increase to 5.0.
• B)net working capital will increase to $500,000.
• C)current ratio will decrease.
• D)net working capital will not change.

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Definitions:

Diagnose

The process of identifying a disease, condition, or injury from its symptoms and signs through examination and testing.

Autopsy

A post-mortem examination of a body to determine the cause of death or the extent of disease, performed by a pathologist.

Delirium

A serious disturbance in mental abilities that results in confused thinking and reduced awareness of the environment.

Undetected

Pertains to something not being discovered or noticed, often used in medical or psychological contexts.