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.increase and remain the same, respectively b.remain the same and decrease, respectively c.both decrease d.both increase

Current Ratio - Current Ratio shows the liquidity of the company assets. Assets that are convertible…

Answered: A company with $70,000 in current…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.
increase and remain the same, respectively

b.
remain the same and decrease, respectively

c.
both decrease

d.
both increase

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