If a Company Converts a Short-Term Note Payable into a Long-Term

question 1

Multiple Choice

If a company converts a short-term note payable into a long-term note payable, this transaction would:

• A) decrease working capital and increase the current ratio.
• B) decrease working capital and decrease the current ratio.
• C) decrease the current ratio and decrease the acid-test ratio.
• D) increase working capital and increase the current ratio.

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