If a Company Uses Cash to Pay Off Some of Its

question 6

Multiple Choice

If a company uses cash to pay off some of its accounts payables, what effect will this have on its liquidity ratios, given that the ratios exceeded 1 before the payoff?

• A)the quick ratio and current ratio will both increase.
• B)the quick ratio and current ratio will both decrease.
• C)the quick ratio will increase but the current ratio will remain unchanged.
• D)the current ratio will increase but the quick ratio will remain unchanged.

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Definitions:

Criticism Fear

Anxiety or apprehension about being judged or receiving negative feedback from others.

Fear Of Success

The fear that occurs when people who have not experienced much success in their lives feel they do not deserve it.

Success Feeling

The sense of achievement and positive emotion experienced when accomplishing personal or professional goals.

Criticism Fear

The unease or anxiety about being judged, disapproved of, or negatively evaluated by others.