As the new accountant for ABC company you have just finished adding up all of the amounts due employees for vacation as of December 31, 20X1. The future cash outflows for vacation expense (related to prior work performed by those employees) is $80,000. The general ledger currently shows a vacation liability of $50,000. You adjust the accounts through a journal entry to increase the liability by $30,000. What happened to the current ratio and profit margin as a result of your journal entry?

Question 5 options:

	The current ratio and the profit margin decreased.
	The current ratio stayed the same, but the profit margin decreased.
	There was no change in these ratios since journal entries balance and debits equal credits.
	The current ratio and the profit margin increased.