Assuming a current ratio of 1.0 and an acid-test ratio of 0.80, how will the borrowing of cash by issuing a six-month note payable affect each ratio?
A) Increase the current ratio and increase the acid-test ratio.
B) No change to the current ratio and increase the acid-test ratio.
C) Decrease the current ratio and decrease the acid-test ratio.
D) Decrease the current ratio and increase the acid-test ratio.
Answer: B
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