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
Option 1: Increase current Ratio
Option 2: Decrease Current ratio
Option 3: Have no effect on current ratio
Option 4: Decrease gross profit ratio
Answer (1)
22nd Jan, 2024
Correct Answer: Increase current Ratio
Solution : Answer = Increase Current Ratio
If C.Assets = 2,00,000, C.liab = 1,00,000, then C.Ratio= 2:1
Sale of office Equipment 4000(Book value Rs 5000)
New Current Assets = 2,04,000
New Current Liab. = 1,00,000
New Current Ratio = $\frac{2,04,000}{1,00,000}$= 2.04:1 (Increase)
Hence, the correct option is 1.
Comments (0)
Related Questions
Trending Articles/News
