Which of the following transaction change the current ratio?

Purchase of goods for cash

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Plant acquire on account

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Sold goods on credit

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Debentures converted into equity capital

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C Plant acquire on account
When plant is acquired on account the fixed asset would increase and there would be increase in the creditors amount, hence the current ratio would decrease. When goods are sold on credit the stock would decrease and the debtors would increase and hence there would be no effect on current ratio.

Suggest Corrections

Similar questions

Q. Answer the question.
State whether the following are revenue or capital transactions.
(a) Carriage paid on goods bought.
(b) Legal expenses paid for illegal use of trade mark.
(c) Capital raised by issue of equity shares.
(d) Allowed discount on issue of shares.
(e) Cost of formation of a new company.
(f) Compensation paid to a discharged employee.

Mention the subsidiary books in which the following transactions are recorded with reason thereof.

(i) Purchase of furniture on credit for use in a shop.

(ii) Sale of goods on credit.

(iii) Goods returned by debtors

(iv) Purchase of stock on credit.

(v) Providing for interest on capital to a proprietor.

(vi) Goods returned to creditors.

(vii) Sale of goods for cash.

Mr. Ramu has the following transactions in the month of July.
July 1st : Ramu started business with a capital of 75,000
2nd : Purchased goods from Manu on credit 25,000
3rd : Sold goods to Sonu 20,000 for cash
4th : Purchased goods from Meenu 15,000 for cash
5th : Sold goods to Tanu for cash 16,000
6th : Goods retuned to Manu 2,000
7th : Bought furniture for 15,000
8th : Bought goods from Zenu 12,000 on credit
9th : Cash paid to Manu 10,000
10th : Sold goods to Jane 13,500 on credit

What shall be the cash balance after considering the above transactions?

Q. Debt to Equity Ratio of a company is 0.5:1. Which of the following suggestions would increase, decrease or not change it:

(i) Issue of Equity Shares:	(ii) Cash received from debtors:
(iii) Redemption of debentures;	(iv) Purchased goods on Credit?

Q. Equity Share Capital ₹ 15,00,000; Gross Profit on Revenue from Operations, i.e., Net Sales 33

\frac{1}{3}

%; Cost Revenue from Operatins or Cost of Goods Sold ₹ 20,00,000; Current Assets ₹ 10,00,000; Current Liabilities ₹ 2,50,000. Calculate Working Capital Turnover Ratio.

Join BYJU'S Learning Program