Practicing Success
Assuming that the current ratio is 2 : 1, purchase of goods on credit would: |
Increase Current ratio Decrease Current ratio Have no effect on Current ratio All of these |
Decrease Current ratio |
Assuming that the current ratio is 2 : 1, purchase of goods on credit would decrease current ratio. For example - Current assets is of ₹200000 and current liabilities is ₹100000 as current ratio is 2:1. |