What Is the Effect of the Payment of an Account

question 23

Multiple Choice

What is the effect of the payment of an account payable on the current ratio and the quick ratio,respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction.)

• A) Increase in current ratio; increase in quick ratio
• B) Decrease in current ratio; no effect on quick ratio
• C) Decrease in current ratio; decrease in quick ratio
• D) No effect on current ratio; no effect on quick ratio

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Definitions:

Nephrology

A branch of medicine that focuses on the diagnosis and treatment of diseases of the kidneys.

Musculoskeletal

Pertains to the combined system of muscles and bones in the body, supporting movement, stability, and physical strength.

Neurological

Pertaining to the nervous system, including the brain, spinal cord, and nerves throughout the body.

Plural

Refers to the form of a word that is used to denote more than one person, thing, idea, etc.