What is the effect of the payment of an account payable on the current ratio...
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Accounting
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 0.9 times and the quick ratio was 0.5 times before this transaction.)
a. Increase in current ratio; increase in quick ratio
b. No effect on current ratio; no effect on the quick ratio
c. Decrease in current ratio; decrease in quick ratio
d.Decrease in current ratio; no effect on the quick ratio
*Explanations are greatly appreciated. Thank you!
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