Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:
Which transaction will make an increase in both the Current Ratio and the Quick Ratio?
Options:
Sale of Non-current Assets for Cash
Cash payment of Non-current Liability
Sale of stock at a loss
Purchase of Stock-in-Trade on Credit
Correct Answer:
Sale of Non-current Assets for Cash
Explanation:
Cash will make the increase in both current assets and quick assets without any change in current liability.