Question 27 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 27 Chapter 4 of +2-B

Question 27 Chapter 4 of +2-B

27. The Quick Ratio of a Company is 0.8: 1. State with Reason, whether the
following transactions will increase, decrease or not change the Quick Ratio :
(i) Purchase of loose tools for Rs. 2,000;
(ii) An insurance premium paid in advance Rs. 500;
(iii) Sale of goods on credit Rs. 3,000;
(iv) Honoured bills Payable of Rs. 5,000 on maturity.

The solution of Question 27 Chapter 4 of +2-B: –

 
Transactions
Impact on Current Ratio Reason
(i) Purchase of loose tools for Rs. 2,000. Decrease There is a decrease in the number of Quick Assets Current Liabilities remain Same.
(ii) The insurance premium paid in advance Rs.
500.
Decrease In this transaction decrease in the number of Quick Assets, Current Liabilities remain Same.
(iii) Sale of goods on credit Rs. 3,000.
10,000.
Increase Increase in Quick Assets in the form of the debtor, no change in current liabilities.
(iv) Honoured bills Payable of Rs. 5,000 on
maturity.

Decrease The decrease in Quick Assets, current liabilities also decrease with this transaction.
     



 

 

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)

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2 Book 3 min 225x300 - Question 27 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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