Time Remaining $47$ minutes $41$ seconds$00$:$47$:$41$

Item $40$

Time Remaining $47$ minutes $41$ seconds$00$:$47$:$41$

If a company uses cash to pay off some of its accounts payables, what effect will this have on its liquidity ratios, given that the ratios exceeded $1$ before the payoff?

Multiple Choice

The current ratio will increase but the quick ratio will remain unchanged.

The quick ratio will increase but the current ratio will remain unchanged.

The quick ratio and current ratio will both decrease.

The quick ratio and current ratio will both increase.