A Company with $70,000 in Current Assets and $50,000 in Current

question 113

Multiple Choice

A company with $70,000 in current assets and $50,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

• A) both decrease
• B) both increase
• C) increase and remain the same, respectively
• D) remain the same and decrease, respectively

---

Definitions:

Consumer Goods

Products and services that satisfy the needs and wants of consumers through their direct consumption or use.

William Levitt

An American real-estate developer known for popularizing the modern suburb with the development of the Levittown communities in the mid-20th century.

GI Bill

A law passed in 1944 that provided a range of benefits for returning World War II veterans (commonly referred to as GIs).

Homeowners

Individuals who own their homes, possessing both the dwelling and the land on which it stands.