A Company with $70,000 in Current Assets and $50,000 in Current

question 113

Multiple Choice

A company with $70,000 in current assets and $50,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will

• A) both decrease
• B) both increase
• C) increase and remain the same, respectively
• D) remain the same and decrease, respectively

---

Definitions:

Contingency

A concept in management and organization theory that suggests there is no one best way to make decisions or organize a corporation, but rather that the best course of action depends on the specific internal and external situation.

Coercive

Coercive power is the ability of a person to force others to comply with demands or orders through the threat of punishment or negative sanctions.

Visibility

The degree to which activities, decisions, or processes are observable, understandable, and known by others within and outside an organization.

Artwork

The creation or expression of something beautiful or significant through skills and imagination, encompassing various forms such as painting, sculpture, and other visual media.