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.
Question : Which of the following transactions will improve the current ratio?
Option 1: Repayment of a Current Liability.
Option 2: Purchase of goods for cash.
Option 3: Purchase of goods on credit.
Option 4: Sale of goods for Rs.2,00,000 (Cost Rs. 1,50,000).
Question : Which of the following transactions will not change in the current ratio?
Option 1: Redemption of Debentures.
Option 2: Purchase of goods for Rs.20,000 against cheque.
Option 3: Purchase of Loose Tools for Rs. 10,000 against cheque.
Option 4: Bill Receivable of Rs.5,000 endorsed to a Creditor is dishonoured.
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