The Following Financial Data Have Been Taken from the Records

Multiple Choice

The following financial data have been taken from the records of CPZ Enterprises.
$\begin{array}{l|r|}\hline \text { Accounts Receivable } & \$ 200000 \\\hline \text { Accounts Payable } & \$ 80000 \\\hline \text { Bonds Payable, Due in Ten Years } & \$ 300000 \\\hline \text { Cash } & \$ 100000 \\\hline \text { Interest Payable, Due in Three Months } & \$ 10000 \\\hline \text { Inventory } & \$ 440000 \\\hline \text { Land } & \$ 250000 \\\hline \text { Notes Payable, Due in Six Months } & \$ 50000 \\\hline\end{array}$
-What will happen to the ratios below if CPZ Enterprises uses cash to pay 50% of its accounts payable?
$\begin{array}{|l|l|l|}\hline & \text { Current Ratio } & \text { Acid-Test Raio } \\\hline \text { A) } & \text { Increase } & \text { Increase } \\\hline \text { B) } & \text { Decrease } & \text { Decrease } \\\hline \text { C) } & \text { Increase } & \text { Decrease } \\\hline \text { D) } & \text { Decrease } & \text { Increase } \\\hline\end{array}$

A) Option A
B) Option B
C) Option C
D) Option D