Question : The Current Ratio of a company is 2:1 . State, that the following transaction would improve, reduce or alter the current ratio.

Purchasing goods on credit.
Option 1: Improve
Option 2: Reduce
Option 3:
Alter
Option 4:
None of the above

Question

Question : The Current Ratio of a company is 2:1 . State, that the following transaction would improve, reduce or alter the current ratio.

Purchasing goods on credit.

Option 1: Improve

Option 2: Reduce

Option 3:

Alter

Option 4:

None of the above

Team Careers360 · Accepted Answer

Correct Answer: Reduce

Solution : Suppose, a good for Rs 50,000 is purchased on a credit basis.
Current Assets = Rs.2,00,000 + Rs.50,000 = Rs.2,50,000.
Current Liabilities = Rs.1,00,000 + Rs.50,000 = Rs.1,50,000.
Current Ratio = Current Assets/Current Liabilities = Rs.2,50,000/Rs.1,50,000 = 1.67:1.
Hence, the correct ratio is option 2.

Exams

Colleges

Predictors

Resources

Quick links

B.Tech CompanionUse Now Your one-stop Counselling package for JEE Main, JEE Advanced and BITSAT

Exams

Colleges & Courses

Predictors

Resources

Exams

Colleges

Predictors & E-Books

Resources

Engineering Preparation

Medical Preparation

Online Courses

Products

Exams

Colleges

Resources

Exams

Colleges

Predictors & Articles

Resources

Exams

Colleges

Predictors

Resources

NEET CompanionUse NowYour one-stop Counselling package for NEET, AIIMS and JIPMER

Exams

Colleges

Upcoming Events

Resources

Exams

Colleges

Resources

Quick Links

Top Streams

Specializations

Resources

Top Providers

Exams

Colleges

Resources

Diploma Colleges

Exams

Colleges

Resources

Exams

Resources

Top Courses & Careers

Colleges

Exams

Upcoming Events

Resources

Other Exams

Exams

Colleges

Top Countries

Student Visas

Exams

Top Schools

Products & Resources

NCERT Study Material

Question : The Current Ratio of a company is 2:1 . State, that the following transaction would improve, reduce or alter the current ratio. Purchasing goods on credit.Option 1: ImproveOption 2: ReduceOption 3: AlterOption 4: None of the above

Related Questions

Question : The Current Ratio of a company is 2:1. State, that the following transaction would improve, reduce or alter the current ratio. Issue of new shares against the purchase of fixed assets.

Question : Quick Ratio 1:1.Current Assets Rs 60,000, Current liabilities Rs 40,000. Calculate the value of inventory.

Question : Who manages the affairs of the company on the behalf of shareholders?

Question : All the affairs of the company are governed by the provisions of the______.

Question : The colour of the eye depends upon the pigment present in:

Trending Articles/News

Sign In/Sign Up

Download the Careers360 App on your Android phone

B.Tech CompanionUse Now
Your one-stop Counselling package for JEE Main, JEE Advanced and BITSAT

NEET CompanionUse Now
Your one-stop Counselling package for NEET, AIIMS and JIPMER

Question : The Current Ratio of a company is 2:1 . State, that the following transaction would improve, reduce or alter the current ratio.

Purchasing goods on credit.
Option 1: Improve
Option 2: Reduce
Option 3:
Alter
Option 4:
None of the above

Question : The Current Ratio of a company is 2:1. State, that the following transaction would improve, reduce or alter the current ratio.

Issue of new shares against the purchase of fixed assets.

Question :
Quick Ratio 1:1.Current Assets Rs 60,000, Current liabilities Rs 40,000. Calculate the value of inventory.

Question :
The colour of the eye depends upon the pigment present in: