Question:
Quick ratio of Megamart Ltd. is 1.5:1. Which of the following transactions will result in a decrease in this ratio?
Quick ratio of Megamart Ltd. is 1.5:1. Which of the following transactions will result in a decrease in this ratio?
Show Hint
Quick assets exclude inventories and prepaid expenses. Cash and receivables are key components.
Updated On: Jan 28, 2025
- Sale of goods costing \rupee 10,000 for \rupee 12,000
- Cash collected from trade receivables \rupee 41,000
- Purchase of goods for cash \rupee 38,000
- Creditors were paid \rupee 11,000
Hide Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
The quick ratio is calculated as:
\[
\text{Quick Ratio} = \frac{\text{Quick Assets}}{\text{Current Liabilities}}
\]
Purchasing goods for cash reduces quick assets (cash), as inventory is not included in quick assets. This decreases the numerator, leading to a lower quick ratio.
Was this answer helpful?
0
0
Top Questions on Debentures
- Ajanta Ltd. purchased machinery worth Rs 36,00,000 from Sujata Ltd. Ajanta Ltd. paid half the amount to Sujata Ltd. through a bank draft and the balance by issuing 8\% debentures of Rs 100 each at a discount of 10\%. Pass the necessary journal entries in the books of Ajanta Ltd. for the above transactions.
- Ridyum Limited issued 5,000, 9\% debentures of Rs 500 each at a premium of 10\%. The amount was payable as follows:
On Application - Rs 200 per debenture
On Allotment – Balance (including premium)
The debentures were fully subscribed and all amounts were duly received. Pass the necessary journal entries for issue of debentures in the books of Ridyum Limited. - Apoorv Ltd. acquired building worth Rs 15,50,000, Machinery worth Rs 11,40,000 and Furniture worth Rs 1,10,000 from Dhruv Ltd. and took over its liabilities of Rs 2,00,000 for a purchase consideration of Rs 25,00,000. Apoorv Ltd. paid the purchase consideration by issuing 12\% debentures of Rs 100 each at a premium of 25\%. Pass the necessary journal entries in the books of Apoorv Ltd. for the above transactions.
- If the amount of debentures issued is more than the amount of the net assets taken over by a company, the difference will be treated as :
- The following journal entry appears in the books of Latvion Ltd. :
\vspace{0.2cm} \begin{tabular}{|l|r|r|} \hline Particulars & Dr. Amount (Rs) & Cr. Amount (Rs)
\hline Bank A/c \hspace{5cm} Dr. & 4,75,000 &
Loss on issue of debentures A/c \hspace{1.9cm} Dr. & 75,000 &
\indent To 12\% Debentures A/c & & 5,00,000
\indent To Premium on Redemption of Debentures A/c & & 50,000
\hline \end{tabular}
\vspace{0.2cm} The discount on issue of debentures is :
View More Questions
Questions Asked in CBSE CLASS XII exam
- Using integration, find the area of the region bounded by the line \[ y = 5x + 2, \] the \( x \)-axis, and the ordinates \( x = -2 \) and \( x = 2 \).
- CBSE CLASS XII - 2025
- Evaluation of Definite Integrals by Substitution
- In case the total cost of a machine less installation charges is greater than Rs 2,00,000, then 20% depreciation is charged, and if total cost of the machine is less than Rs 2,00,000 then 10% depreciation is charged.
Write the steps to create the 'IF' function using the Formula tab and dialogue box on a given spreadsheet. Also, write the syntax of the result.- CBSE CLASS XII - 2025
- Computerised Accounting
- State the advantages of 'Pivot Table' report.
- CBSE CLASS XII - 2025
- Basic Knowledge of Excel
- To see all available shape styles which of the following button is clicked ?
- CBSE CLASS XII - 2025
- Computerised Accounting
- Which of the following is a part of Asset group 'Current Assets' in account group of Assets?
- CBSE CLASS XII - 2025
- Computerised Accounting
View More Questions