Current Assets and Current Liabilities for Brayden Company Are as Follows:​​

question 176

Multiple Choice

Current assets and current liabilities for Brayden Company are as follows:​​ What conclusions can be drawn regarding Brayden's ability to meet its financial obligations?​

• A)The current ratio has worsened, and the working capital has decreased.
• B)The current ratio has improved, and the working capital has increased.
• C)The current ratio has improved, while the working capital has decreased.
• D)The current ratio has worsened, but the working capital has increased.

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Definitions:

Capital Lease

A lease agreement that transfers substantially all the risks and rewards of ownership of the asset to the lessee, effectively treated as a purchase of the asset.

Periodic Cash Payments

Payments made regularly over a period of time, such as dividends or loan repayments.

Lease Rental Expense

An expense incurred from leasing an asset, which is typically recorded on a lessee's income statement.

Lease Liability

An obligation representing the present value of leasing payments due under a lease agreement.