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Which of the following will increase the current ratio which is currently 2:1?
  • a)
    Bills Receivable of ₹2,000 endorsed to a creditor is dishonored.
  • b)
    ₹ 8,000 cash collected from debtors of ₹ 8,500 is full and final settlement.
  • c)
    Sale of goods worth ₹ 11,000 (cost ₹ 10,000)
  • d)
    Purchase of inventory ₹ 20,000 on credit.
Correct answer is option 'C'. Can you explain this answer?
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Which of the following will increase the current ratio which is curren...
It will increase cash by ₹11,000 and decrease the stock by ₹10,000 and ultimately, the current ratio will improve or increase.
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Which of the following will increase the current ratio which is curren...
Explanation:

Effects of each option on the current ratio:

- Bills Receivable of 2,000 endorsed to a creditor is dishonored: This will not have any impact on the current ratio as it does not involve any cash or current assets.

- 8,000 cash collected from debtors of 8,500 is full and final settlement: This will decrease the current assets by 8,000 but will also decrease current liabilities by 8,500, resulting in a decrease in the current ratio.

- Sale of goods worth 11,000 (cost 10,000): This will increase the current assets by 11,000 but will not affect current liabilities, leading to an increase in the current ratio.

- Purchase of inventory 20,000 on credit: This will increase current assets by 20,000 but will also increase current liabilities by 20,000, resulting in no change in the current ratio.

Therefore, option C (Sale of goods worth 11,000) will increase the current ratio as it increases current assets without affecting current liabilities.
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Read the following text and answer the following questions on the basis of the same:Shunt resistance: The ammeter shunt is the device which provides the low resistance path to the flow of current. It is connected in parallel with the ammeter. In some ammeter the shunt is in-built inside the instrument while in others it is externally connected to the circuit. Ammeters are designed for measurement of low current. For measuring high current, the shunt is connected in parallel to the ammeter. The significant portion of the current passes to the shunt because of the low resistance path and little amount of current passes through the ammeter. The shunt is connected in parallel to the ammeter because of which the voltage drops across the meter and shunt remain the same. Thus, the movement of the pointer is not affected by the shunt. Let us consider that the current to be measured is I. The circuit has ammeter and shunt connected parallel to each other. The ammeter is designed for measurement of small current say, Im. The magnitude of the current I passes through the meter is very high, and it will burn the meter. So, for measuring the current I the shunt is required in the circuit. As the shunt connects in parallel with the ammeter, thus the same voltage drops occur between them:IShRSH = ImRm∴ RSH = ImRm/ISHShunt current ISH = I – ImSo, RSH = ImRm/(I – Im)∴ I/Im = 1 + (Rm/RSH)The ratio of the total current to the current required for the movement of the ammeter coil is called the multiplying power of the shunt.∴ The multiplying power = m = I/ImRSH = Rm / (m – 1)The following are the requirements of the shunt.• The resistance of the shunt should remain constant with time.• The temperature of the material should remain the same even though substantial current flows through the circuit.Current through shunt is

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Which of the following will increase the current ratio which is currently 2:1?a)Bills Receivable of 2,000 endorsed to a creditor is dishonored.b) 8,000 cash collected from debtors of 8,500 is full and final settlement.c)Sale of goods worth 11,000 (cost 10,000)d)Purchase of inventory 20,000 on credit.Correct answer is option 'C'. Can you explain this answer?
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Which of the following will increase the current ratio which is currently 2:1?a)Bills Receivable of 2,000 endorsed to a creditor is dishonored.b) 8,000 cash collected from debtors of 8,500 is full and final settlement.c)Sale of goods worth 11,000 (cost 10,000)d)Purchase of inventory 20,000 on credit.Correct answer is option 'C'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Which of the following will increase the current ratio which is currently 2:1?a)Bills Receivable of 2,000 endorsed to a creditor is dishonored.b) 8,000 cash collected from debtors of 8,500 is full and final settlement.c)Sale of goods worth 11,000 (cost 10,000)d)Purchase of inventory 20,000 on credit.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following will increase the current ratio which is currently 2:1?a)Bills Receivable of 2,000 endorsed to a creditor is dishonored.b) 8,000 cash collected from debtors of 8,500 is full and final settlement.c)Sale of goods worth 11,000 (cost 10,000)d)Purchase of inventory 20,000 on credit.Correct answer is option 'C'. Can you explain this answer?.
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