1. If Marshall Toys has a current ratio of 2.5 and working capital of $1,100,000, which of the following will cause both the current ratio and working capital to decrease? Select one:

A. Paid accounts payable in the amount of $30,000B. Recorded unpaid salaries in the amount of $80,000C. Borrowed $100,000 from a bank to be repaid in 90-daysD. Purchased $15,000 of inventory on credit

2. Maxwell Industries recorded and paid $900 advertising for the current month. Which occurred? Select one: A. Current assets increase B. Gross profit decreases C. Operating income decreases D. Retained earnings increases

3.

On January 1, 2013, JOLO Company paid a $16,000 cash security deposit to rent office space. Which of the following would be the correct journal entry to record this transaction? Select one: A.

Rent expense	16,000
Cash		16,000

B.

Security deposit	16,000
Cash		16,000

C.

Cash	16,000
Rent expense		16,000

D.

Cash	16,000
Security deposit		16,000