A company paid off a $100,000 2-year note payable. The effect of this transaction is that the
A)current ratio decreased.
B)earnings per share increased.
C)working capital increased.
D)debt-to-equity ratio increased.

Question

Quizplus · Accepted Answer

Paying off a note payable decreases current liabilities, which can increase the current ratio if current assets remain constant or decrease less than the decrease in current liabilities.

A Company Paid Off a $100,000 2-Year Note Payable