Current Ratio of a company is 3 : 1. State with reason whether the payment of Rs. 20,000 to the creditors will increase, decrease or not change the ra

Question

Current Ratio of a company is 3 : 1. State with reason whether the payment of Rs. 20,000 to the creditors will increase, decrease or not change the ra

Current Ratio of a company is 3 : 1. State with reason whether the payment of Rs. 20,000 to the creditors will increase, decrease or not change the ratio.

Monjur Alahi

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2025-01-04 04:42

1 Answers

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Salim Ahmed Kawsar · Accepted Answer · 2023-02-05T15:29:48+06:00

Salim Ahmed Kawsar

After payment of Rs. 20,000 to the creditors, both total of current assets and total of current liabilities will be reduced by the same amount. Therefore, Current Ratio will increase.

6 views Answered 2023-02-05 15:29