Question: Q3a. The current ratio is 2 : 1. State giving reasons which of the following transactions would improve, reduce and not change the current ratio:

Q3a. The current ratio is 2 : 1. State giving reasons

Q3a. The current ratio is 2 : 1. State giving reasons which of the following transactions would improve, reduce and not change the current ratio: (5 marks) (i) Payment of current liability; (ii) Purchased goods on credit; (iii) Sale of a Computer (Book value: Rs. 4,000) for Rs. 3,000 only; (iv) Sale of merchandise (goods) costing Rs. 10,000 for Rs. 11,000; (v) Payment of dividend. Q3b. A trader carries an Average Inventory of Rs. 75,000. His Inventory Turnover Ratio is 12 times. Find out his profit, if he sells at a profit of 20% on sales

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