The Following Items Appear on the Balance Sheet of the Piano

question 15

Multiple Choice

The following items appear on the balance sheet of The Piano Company at the end of 2018 and 2017: $\begin{array}{lrr}&2018&2017\\\text { Current assets } & \$ 6,000 & \$ 3,000 \\\text { Long-term assets } & 7,000 & 4,000 \\\text { Current liabilities } & 2,000 & 3,000 \\\text { Long-term liabilities } & 7,000 & 0 \\\text { Stockhol ders' equity } & 4,000 & 4,000\end{array}$ Between 2017 and 2018,

• A)The Piano Company's debt-to-equity ratio and current ratio both increased.
• B)The Piano Company's debt-to-equity ratio and current ratio both decreased.
• C)The Piano Company's debt-to-equity ratio increased,and its debt-to-total assets ratio decreased.
• D)The Piano Company's debt-to-equity ratio decreased,and its debt-to-total assets ratio increased.

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Definitions:

Seafloor Spreading

The process by which new oceanic crust is formed at mid-ocean ridges and slowly moves away from the ridge, contributing to continental drift.

Continental Drift

The theory that Earth's continents have moved over geologic time relative to each other, thus appearing to drift across the ocean bed.

Mid-Atlantic Ridge

A continuous underwater mountain range in the Atlantic Ocean, formed by tectonic plate divergence.

Submarine Mountain

An underwater mountain, formed by volcanic activity or tectonic movements, rising significantly above the surrounding seafloor.