If a Company Converted a Short-Term Note Payable into a Long-Term

question 90

Multiple Choice

If a company converted a short-term note payable into a long-term note payable,this transaction would:

• A) decrease only working capital.
• B) decrease both working capital and the current ratio.
• C) increase only working capital.
• D) increase both working capital and the current ratio.
• E) have no effect on either the current ratio or net working capital.

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Definitions:

Trial

A formal judicial proceeding where parties present evidence and arguments to a judge or jury for a legal dispute resolution.

Plaintiff

The party who initiates a lawsuit in a court of law by filing a complaint against the defendant seeking a legal remedy.

Damages

A monetary award sought as a remedy for a breach of contract or a tortious act.

Defendant

A person or entity against whom a legal action is brought in a court of law.