Swanson Company Had $250,000 of Current Assets and $90,000 of Current

question 46

Multiple Choice

Swanson Company had $250,000 of current assets and $90,000 of current liabilities before borrowing $60,000 from the bank with a 3-month note payable.What effect did the borrowing transaction have on Swanson Company's current ratio?

• A) The ratio remained unchanged.
• B) The change in the current ratio cannot be determined.
• C) The ratio decreased.
• D) The ratio increased.

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Definitions:

Adult Child

A term used to describe adults who have not assumed traditional adult responsibilities or roles, often due to psychological or social factors.

Compartmentalization

A psychological process of dividing and categorizing thoughts, feelings, and behaviors into distinct sections to manage conflict or anxiety.

Parent

An individual who has a biological or legal responsibility for raising and caring for a child.

Talcott Parsons

An influential American sociologist known for his contributions to social theory, particularly the action theory and the systems theory.