Solved

Fullerton Co If Fullerton Uses Cash of $10,000 to Pay a Current

Question 81

Multiple Choice

Fullerton Co.has the following information from its accounting records:  Current assets $80,000 Total assets 200,000 Current liabilities 40,000 Total liabilities 120,000\begin{array}{lr}\text { Current assets } & \$ 80,000 \\\text { Total assets } & 200,000 \\\text { Current liabilities } & 40,000 \\\text { Total liabilities } & 120,000\end{array} If Fullerton uses cash of $10,000 to pay a current liability,its:


A) current ratio increases and its debt-to-assets ratio increases.
B) current ratio increases and its debt-to-assets ratio decreases.
C) current ratio decreases and its debt-to-assets ratio increases.
D) current ratio decreases and its debt-to-assets ratio decreases.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents