Question : Which of the following transactions will decrease the current ratio?
Option 1: Sale of goods for Rs.2,00,000 (Cost Rs. 1,50,000).
Option 2: Sale of goods for Rs.2,00,000 (Cost Rs.2,20,000)
Option 3: Sale of furniture for Rs.40,000 (Book Value Rs.50,000
Option 4: Bill Receivable endorsed to a Creditor
Correct Answer: Sale of goods for Rs.2,00,000 (Cost Rs.2,20,000)
Solution : Answer = Sale of goods for Rs.2,00,000 (Cost Rs.2,20,000)
Sold Goods C.P 2,20,000 S.P 2,00,000
let we assume C.Ratio $=2: 1$
$\begin{aligned}
C \cdot \text { Ratio } & =\frac{C A}{C \cdot \operatorname{liaB}}=\frac{2,00,000+2,00,000-2,0,000}{1,00,000} \\
\\& =\frac{1,80,000}{1,00,000}=1.8: 1 \text { Decrease }
\end{aligned}$
Hence, the correct option is 2.
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