A. Because Depoole has a quick and current ratio of greater than one (because total quick assets exceeded total current liabilities), the payment of a payable would increase both ratios. This is because the payment of a payable will reduce both the current assets and the current liabilities by the same amount. Let us assume that Depoole had current and quick assets of $150 and current liabilities of $100. Given that the current and quick assets were both $150, both ratios are 1.50. Now let assume that they paid a $20 liability. This reduced the quick and current assets to $130 and reduced the current liabilities to $80. Now, both ratios are 1.625, which is higher than they had been.

B. The current ratio would be affected by this transaction as both the numerator and denominator of the current ratio would be decreased by the amount of the liability settled.

C. Because both of these ratios were higher than 1 prior to this transaction, both of these ratios will increase as a result of the settlement of the liability.

D. The quick ratio would be affected by this transaction as both the numerator and denominator of the quick ratio would be decreased by the amount of the liability settled.