A Company's Current Ratio and Its Acid-Test Ratio Are Both

question 257

Multiple Choice

A company's current ratio and its acid-test ratio are both greater than 1. Payment of an account payable would:

• A) increase the current ratio but the acid-test ratio would not be affected.
• B) increase the acid-test ratio but the current ratio would not be affected.
• C) increase both the current and acid-test ratios.
• D) decrease both the current and acid-test ratios.

---

Definitions:

Iris

The hue-bearing region of the eye that adjusts how wide the pupil is and governs the quantity of light entering.

Inner Lining

Refers to the innermost layer of a structure, such as the lining of organs, vessels, or cavities in the body.

Light Sensitive

Having a heightened responsiveness or susceptibility to the effects of light.

Retina

At the eye's back, there's a sheet of light-sensitive cells that start nerve responses, traveling through the optic nerve to the brain, where they result in the formation of a visual picture.