Q. 7 DK Goel Accounting Ratios Solutions Class 12 CBSE (2024-25)

the solutions of Question number 7 of Accounting Ratios chapter 5 of DK Goel Class 12 CBSE (2024-25)

State giving reasons which of the following transactions would improve; Reduce; or Not Change the Quick Ratio if Quick Ratio is (i) 1.5 : 1; (ii) 1 : 1 or (iii) 0.8 : 1.

(a) Payment of Outstanding Liabilities
(b) Debentures of ₹ 2,00,000 converted into equity shares.
(c) Purchase of goods on Credit of 2 months.
(d) B/R endorsed to a Creditor.
(e) Sale of goods Costing ₹ 50,000 for ₹ 45,000.
(f) B/R drawn on a Debtor.
(g) Paid Rent ₹ 3,000 in advance.
(h) Trade receivables included a debtor Sh. Ashok who paid his entire amount due ₹ 9,700.

Ans.

(i) If Quick Ratio is 1.5 : 1
(a) Improve; (b) Not change; (c) Reduce; (d) Improve; (e) Improve; (f) Not change; (g) Reduce; (h) Not change.

(ii) If Quick Ratio is 1 : 1
(a) Not Change; (b) Not Change; (c) Reduce; (d) Not Change; (e) Improve (f) Not Change; (g) Reduce; (h) Not Change.

(iii) If Quick Ratio is 0.8 : 1
(a) Reduce; (b) Not change; (c) Reduce; (d) Reduce; (e) Improve; (f) Not change; (g) Reduce; (h) Not Change

Solution:-