Explanation:
Selling goods on credit increases current assets (debtors) without affecting current liabilities, thereby increasing a current ratio that is already greater than 1.
S1: Marginal costing distinguishes between fixed and variable costs. S2: Absorption costing distinguishes between fixed and variable costs. Which statement(s) is/are correct?
Explanation:
Marginal costing strictly separates costs into fixed and variable components. Absorption costing (traditional costing) charges all manufacturing costs (both fixed and variable) to the product, without this strict separation for decision making. S1 is correct, S2 is incorrect.
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