Q. 31. The Quick Ratio of a company is 0.8 : 1. State, with reason, whether the following transactions will increase, decrease or not change the Quick Ratio:
(i) Purchase of loose tools for ₹ 2,000;
(ii) Insurance premium paid in advance ₹ 500;
(iii) Sale of goods on credit ₹ 3,000;
(iv) Honoured a bills payable of ₹ 5,000 on maturity.
[Ans.: (i) Decrease, (ii) Decrease; (iii) Increase; (iv) Decrease.]
Solution:-
