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Question 26 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 26 Chapter 4 of +2-B
Question No. 26 - Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 26 Chapter 4 of +2-B

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26. Quick Ratio of a company is 2: 1. State giving reasons, which of the
following transactions would (i) Improve, (ii) Reduce, (iii) Not change the Quick Ratio:
Purchase of goods for cash;
Purchase of goods on credit;
Sale of goods (costing Rs. 10,000) for Rs. 10,000;
Sale of goods (costing Rs. 10,000) for Rs. 11,000;
Cash received from Trade Receivables.

The solution of Question 26 Chapter 4 of +2-B: –

 
Transactions
Impact on Current RatioReason
(a) Purchase of goods for cash.ReduceThere is a decrease in the amount of Cash (Current Assets) and increase in, Inventory, Liquid Assets are decreased by payment of goods.
(b) Purchase of goods on credit.ReduceThe is Increase in the number of Current Liabilities and Liquid Assets remain the same.
(c) Sale of goods (costing Rs. 10,000) for Rs.
10,000.
ImproveIncrease in Quick Assets in the form of either in cash or debtor. This results in no change in current liabilities.
(d) Sale of goods (costing Rs. 10,000) for Rs.
11,000
No ChangeIncrease in Quick Assets in the form of either in cash or debtor. This results in no change in current liabilities.
(e) Cash received from Trade Receivables.No ChangeWith this transaction, the Quick Assets value decrease beside this also decrease in Quick Assets in Form of Debtors.
   



 

 

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Balance Sheet: Meaning, Format & Examples

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Also, Check out the solved question of previous Chapters: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements

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