The Following Financial Data Have Been Taken from the Records

question 180

Multiple Choice

The following financial data have been taken from the records of CPZ Enterprises.
$\begin{array}{l|r|}\hline \text { Accounts Receivable } & \$ 200000 \\\hline \text { Accounts Payable } & \$ 80000 \\\hline \text { Bonds Payable, Due in Ten Years } & \$ 300000 \\\hline \text { Cash } & \$ 100000 \\\hline \text { Interest Payable, Due in Three Months } & \$ 10000 \\\hline \text { Inventory } & \$ 440000 \\\hline \text { Land } & \$ 250000 \\\hline \text { Notes Payable, Due in Six Months } & \$ 50000 \\\hline\end{array}$
-What will happen to the ratios below if CPZ Enterprises uses cash to pay 50% of its accounts payable?
$\begin{array}{|l|l|l|}\hline & \text { Current Ratio } & \text { Acid-Test Raio } \\\hline \text { A) } & \text { Increase } & \text { Increase } \\\hline \text { B) } & \text { Decrease } & \text { Decrease } \\\hline \text { C) } & \text { Increase } & \text { Decrease } \\\hline \text { D) } & \text { Decrease } & \text { Increase } \\\hline\end{array}$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Bond Order

A measure of the number of chemical bonds between a pair of atoms, indicative of bond strength and stability.

π Molecular Orbitals

Molecular orbitals formed by the sideways overlap of p orbitals, contributing to the bonding in molecules with double or triple bonds.

KMnO₄

Potassium permanganate, a strong oxidizing agent characterized by its purple color, used in qualitative organic analysis and as a disinfectant.

MO Energy Diagram

A graphical representation of the molecular orbital energies, showing the bonding and antibonding interactions in molecules.