Q. 31 DK Goel Accounting Ratios Solutions Class 12 CBSE (2024-25)

the solutions of Question number 31 of Accounting Ratios chapter 5 of DK Goel Class 12 CBSE (2024-25)

Assuming that the debt equity ratio is 2 : 1, State giving reasons, which of the following transactions would (i) increase (ii) decrease (iii) not alter the debt-equity ratio:-

(i) Issue of Preference Shares
(ii) Buy-back of its own shares by a Company
(iii) Issue of debentures
(iv) Repayment of Bank Loan
(v) Sale of a non-current asset at par
(vi) Sale of a non-Current asset at profit
(vii) Sale of a non-Current asset at loss
(viii) Purchase of a non-current asset on a credit of 3 months.
(ix) Purchase of a non-current asset on long-term deferred payment basis.

[Ans. (i) Decrease (ii) Increase (iii) Increase (iv) Decrease (v) Not alter (vi) Decrease (vii) Increase (viii) Not alter (ix) Increase.]

Solution:-