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

Multiple Choice

If a company converts a short-termnote payable into a long-term note payable,what would be the effect of this transaction?

A) A decrease in working capital and an increase in the current ratio.
B) A decrease in both working capital and the current ratio.
C) A decrease in both the current ratio and the acid-test ratio.
D) An increase in both working capital and the current ratio.