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Elton Company made a $2 million sale on account. How will this transaction affect the current ratio and the debt ratio? (Hint: Make up easy

Elton Company made a $2 million sale on account. How will this transaction affect the current ratio and the debt ratio? (Hint: Make up easy numbers and calculate the ratios)

It improves both the current ratio and the debt ratio.

It hurts both the current ratio and the debt ratio.

It hurts the current ratio and has no effect on the debt ratio.

It improves the current ratio and has no effect on the debt ratio.

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