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Question : Assuming that the Current Ratio is 2: 1, the Sale of a fixed asset on a credit of 2 months would _____.

Option 1: Increase current ratio

Option 2: Decrease current ratio

Option 3: Neither increase nor decrease

Option 4: Increase debt equity ratio


Team Careers360 2nd Jan, 2024
Answer (1)
Team Careers360 9th Jan, 2024

Correct Answer: Increase current ratio


Solution : Answer = Increase the current ratio

Assuming C. Ratio = 2 :1

Sale of fixed Assets on Credit

$=\frac{20,000}{10,000}$

Would increase the Current Ratio
Hence, the correct option is 1.

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