Question : Assuming that the Current Ratio is 2: 1, the Sale of a fixed asset on a credit of 2 months would _____.
Option 1: Increase current ratio
Option 2: Decrease current ratio
Option 3: Neither increase nor decrease
Option 4: Increase debt equity ratio
Correct Answer: Increase current ratio
Solution : Answer = Increase the current ratio
Assuming C. Ratio = 2 :1
Sale of fixed Assets on Credit
$=\frac{20,000}{10,000}$
Would increase the Current Ratio Hence, the correct option is 1.
Question : The Debt-Equity Ratio of a Company is 1: 2. Goods purchased on Credit would
Option 1: Increase debt to equity ratio
Option 2: Decrease debt to equity ratio
Option 3: No change
Option 4: Increase current ratio
Question : The Debt-Equity Ratio of a Company is 1: 2. Payment of Dividend Payable would
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