When a Company Pays a Bill from a Plumber for Previous

question 84

Multiple Choice

When a company pays a bill from a plumber for previous services on account:

• A) Its debt to equity ratio decreases.
• B) Its acid-test ratio always remains unchanged.
• C) Its current ratio always remains unchanged.
• D) All of the other options are correct.

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Definitions:

Variable Rate

An interest rate that can change over time, often based on an underlying benchmark interest rate or index that reflects the cost of borrowing in the credit markets.

Forward Contract

An agreement that isn't standardized between two parties to purchase or sell an asset at a future date determined today at a price agreed upon today.

Legally Binding

An agreement enforceable by law, with obligations that must be fulfilled by all parties involved.

Agreed-upon Price

The price that has been mutually accepted by the buyer and seller in a transaction.