Ed's Drive-In Had $175,000 of Current Assets and $80,000 of Current

question 26

Multiple Choice

Ed's Drive-In had $175,000 of current assets and $80,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable.What effect did the borrowing transaction have on Ed's Drive-In's current ratio?

• A)The ratio remained unchanged.
• B)The change in the current ratio cannot be determined.
• C)The ratio decreased.
• D)The ratio increased.

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Definitions:

Reactions

Emotional or behavior responses triggered by external or internal stimuli.

Events

Occurrences or happenings, especially ones of significance, that are planned or unforeseen.

Modes of Thinking

The various ways in which individuals process information and solve problems, influenced by cognitive styles and patterns.

Inputs

Resources, information, or efforts that are used to produce goods or services in a process or system.