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Which of the following does not help to increase Current Ratio?

<p><strong>(a)Issue of Debentures to buy Stock,</strong></p> <p><strong> (b)Issue of Debentures to pay Creditors,</strong></p> <p><strong>(c)Sale of Investment to pay Creditors,</strong></p> <p><strong>(d)Avail Bank Overdraft to buy Machine. </strong></p>

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Question ajoutée par VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
Date de publication: 2014/09/20
georgei assi
par georgei assi , مدير حسابات , المجموعة السورية

the answer A

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
par VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Answer: D= Avail Bank Overdraft to buy Machine  

Ahmed Abd Alwahab Awad Ibrahim
par Ahmed Abd Alwahab Awad Ibrahim , Chief Accounting , ICCDP

(a)Issue of Debentures to buy Stock,

 

Because it is related to long term

a) Issue  of  Debentures  to  buy  Stock

Khaled Mohee Eldeen Abbas Mahmoud
par Khaled Mohee Eldeen Abbas Mahmoud , Chartered Accountant # 10465 , Self-employed

(b) Issue of Debentures to pay Creditors

one of the ways to improve the current ratio is to take a long-term loan for all of the current debt. By doing this, the current liabilities are completed eliminated which results in a terrific current asset ratio. The debt; however, is still there, but will be paid over a longer time span.

Issue of Debentures to buy Stock.

This affects only equity and long term liabilities so doesn't have any impact on current ratio. 

Sridhar Rajagopal
par Sridhar Rajagopal , Financial Controller , Sai Krishna Bio Tech

perfect answer is A if you go for D and unused amount of O/D may be possible but prudency isUse O/D ad and when required as it carries interest which also increase your o/d namely C/L

 

 

Anayatullah Tahir
par Anayatullah Tahir , Finance Manager , Etqan Projects

Option A,

Because that option does not involve any current asset or current liability

FITAH MOHAMED
par FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

ANSWER D

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