[The following information applies to the questions displayed below.]
The following information is taken from the balance sheet of Menendez Company on January 1, Year 1:
![[The following information applies to the questions displayed below.] The following information is taken from the balance sheet of Menendez Company on January 1, Year 1: -On January 2,Year 1,the company earned revenue on account of $8,000. How will this transaction affect the current ratio? A) It will decrease the current ratio to 1:1. B) It will increase the current ratio to 3:1. C) It will increase the current ratio to 5:1. D) It will have no effect on the current ratio.](https://d2lvgg3v3hfg70.cloudfront.net/TB1323/11ea7eef_7f37_fb2e_ace2_454a94482dbd_TB1323_00_TB1323_00_TB1323_00_TB1323_00.jpg)
-On January 2,Year 1,the company earned revenue on account of $8,000.
How will this transaction affect the current ratio?
A) It will decrease the current ratio to 1:1.
B) It will increase the current ratio to 3:1.
C) It will increase the current ratio to 5:1.
D) It will have no effect on the current ratio.
Correct Answer:
Verified
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