At December 30, year 3, Vida Co. had cash of $200,000, a current ratio of 1:5:1 and a quick ratio of 5:1. On December 31, year 3, all cash was used to reduce A/P. how did these cash payments affect the ratios?
a. increase ; decrease
b. increase ; no effect
c. decrease ; increase
d. decrease ; no effect
Ans: a. increase ; decrease
Business
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