Elder Enterprises is consistently profitable. It's normal financial statement ratios include that it has a currentratio of 2 to 1 and the inventoryturnover is 4 times.

Determine the effect on each ratio of this transaction: Accounts Payable are paid at year end.

The current ratioincreases; inventory turnover increases

The current ratiois unaffected; inventory turnover is unaffected

The current ratioincreases; inventory turnover is unaffected

The current ratiois unaffected; inventory turnover decreases