Oats,Inc ,Has $14,000 in Cash,$37,000 in Accounts Receivable,$2,500 in Supplies,$52,000

question 25

Multiple Choice

Oats,Inc. ,has $14,000 in Cash,$37,000 in Accounts Receivable,$2,500 in Supplies,$52,000 in Accounts Payable and $12,400 in Wages Payable.If Oats uses Cash to pay off $8,000 of the Wages Payable,which of the following statements is correct?

• A)The company's current ratio will not change since current assets decreased by the same amount that current liabilities decreased.
• B)The company will look more favorable to creditors.
• C)The company has a greater ability to pay current liabilities.
• D)The company's current ratio will decrease.