Fullerton Co If Fullerton Uses Cash of $10,000 to Pay a Current

question 142

Multiple Choice

Fullerton Co.has the following information from its accounting records: $\begin{array}{lr}\text { Current assets } & \$ 80,000 \\\text { Total assets } & 200,000 \\\text { Current liabilities } & 40,000 \\\text { Total liabilities } & 120,000\end{array}$ If Fullerton uses cash of $10,000 to pay a current liability,its:

• A)current ratio increases and its debt-to-assets ratio increases.
• B)current ratio increases and its debt-to-assets ratio decreases.
• C)current ratio decreases and its debt-to-assets ratio increases.
• D)current ratio decreases and its debt-to-assets ratio decreases.

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Definitions:

Net Energy

The difference between the energy expended to harvest an energy source and the amount of energy gained from that harvest.

Ozone

A molecule made of three oxygen atoms, significant in the stratosphere where it protects life by absorbing harmful ultraviolet radiation.

Hydrogen Gas

A colorless, odorless, and highly flammable gas, the lightest and most abundant element in the universe, used in various industrial processes.

Biomass

Organic material derived from plants and animals, which can be used as a renewable energy source.