No.
Q1.
The current ratio of a company is 2 : 1. What will be the effect of the
following transactions on this ratio?
(a) Purchased goods on credit;
(b) Sale of a Machine (Book value: 34,000) for 33,000 only;
(C) Sale of merchandise (goods) costing 310,000 for 11,000.
Answers
Answered by
1
Answer:
a) decrease
b) increase
c) decrease
Explanation:
a) bcoz it will increase rhe current assets and liabilities by same amount
b) bcoz it will increase the current assets by rs 33000( cash will increase, decrease in machinery will not be counted as it is a fixed asset and not a current asset)
c) bcoz it will decrease the current assets by the amount equal to the loss[increase in cash(current asset)11000 and decrease in goods(current asset)310000.]
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