Question : The Current Ratio of a Company is 2:1. Redemption of Debentures would
Option 1: Increase current Ratio
Option 2: Decrease Current ratio
Option 3: Have no effect on current ratio
Option 4: Decrease gross profit ratio
Correct Answer: Decrease Current ratio
Solution : Answer = Decrease Current ratio
Redemption of Debentures
Both Current assets and Current liabilities will be reduced. So, the Current ratio will be decreased . Hence, the correct option is 2.
Question : The Current Ratio of the company is 2:1. The Sale of Office Equipment for Rs. 4,000 (Book Value Rs.5,000) would
Question : If the current ratio were 2:1, how the purchase of goods on credit will affect the current ratio?
Question : The Current Ratio of a Company is 2: 1. What will be the effect on the current Ratio if purchased goods on credit
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