A company issues $200,000 in long-term bonds and buys $200,000 in inventory for cash. Which of the following statements is true?
A) The quick ratio will stay the same and the times interest earned ratio will fall.
B) The quick ratio will rise and the times interest earned ratio will rise.
C) The quick ratio will rise but the times interest earned ratio will fall.
D) The quick ratio will rise and the times interest earned ratio will stay the same.
Correct Answer:
Verified
Q73: Arid Company has a quick ratio of
Q74: Because interest rates have fallen, a company
Q77: You are considering buying a bond from
Q78: A company's total assets and total liabilities
Q80: Some bonds allow the borrower to repay
Q81: When a company encounters a contingent liability
Q83: A company issues a 5-year bond with
Q84: On January 1, your company issues a
Q86: Using straight-line amortization,when a bond is sold
Q190: Which of the following is not used
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents