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What Is the Effect of the Payment of an Account

Question 1

Multiple Choice

What is the effect of the payment of an account payable on the current ratio and the quick ratio,respectively? (Assume the current ratio was 2.3 times and the quick ratio was 2.1 times before this transaction. )


A) Decrease in current ratio;no effect on quick ratio
B) Increase in current ratio;increase in quick ratio
C) No effect on current ratio;no effect on quick ratio
D) Decrease in current ratio;decrease in quick ratio

Correct Answer:

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