If a company converted a short-term note payable into a long-term note payable, this transaction would:
A)increase only working capital.
B)decrease only working capital.
C)have no effect on either the current ratio or net working capital.
D)increase both working capital and the current ratio.
E)decrease both working capital and the current ratio.

Question

Quizplus · Accepted Answer

Converting a short-term note payable into a long-term note payable decreases current liabilities without affecting current assets, thereby increasing working capital and improving the current ratio.

If a Company Converted a Short-Term Note Payable into a Long-Term