Lefton Company Made a $2 Million Sale on Account

question 119

Multiple Choice

Lefton Company made a $2 million sale on account. How will this transaction affect the current ratio and the debt ratio?

• A)It improves the current ratio and has no effect on the debt ratio.
• B)It improves both the current ratio and the debt ratio.
• C)It hurts the current ratio and has no effect on the debt ratio.
• D)It hurts both the current ratio and the debt ratio.

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Definitions:

Deficiency Motivation

Motivation that arises from the lack of essential needs, leading individuals to seek fulfillment to overcome the feelings of deficiency.

Cognitive Needs

Mental requirements or desires that drive individuals to seek knowledge, explore, and understand their environment.

Emotionally Healthy

Pertains to a state of wellbeing where an individual recognizes, understands, and effectively manages their emotions.

Safety Needs

According to Maslow's hierarchy, these are the requirements for physical security, stability, and freedom from fear.