If the current ratio is 2:1, which of the following transactions will increase the ratio?
A. Paid cash to creditors
B. Issued debentures
C. Sold goods on credit
D. Purchased goods on credit
Answer: Option C
Solution (By JKSSB Mock Tests)
Selling goods on credit increases current assets (debtors) without affecting current liabilities, thereby increasing a current ratio that is already greater than 1.
S1: In the absence of a partnership deed, interest on partner's loan is allowed at 6% per annum. S2: In the absence of a partnership deed, interest on partner's capital is not allowed. Which statement(s) is/are correct?
Explanation:
The Partnership Act 1932 mandates that if the deed is silent, interest on a partner's loan is allowed at 6% p.a., but no interest on capital is allowed. Both statements are correct.
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