Assuming that the current ratio is 2:1, state giving reasons, which of the following transactions would (i) improve, (ii) reduce, or (iii) not alter, the current ratio: (a) Cash collected from trade receivables (b) B/R received from trade receivables 8 (c) B/R endorsed to trade payables (d) B/R dishuonored (e) Sale of inventories at par for cash (f) Sale of inventories at profit for cash (g) Sale of inventories at profit on credit (h) Sale of a fixed asset on a credit of 2 months. (i) Sale of a fixed asset on long term deferred payment basis. (j) Issue of new shares against purchase of fixed asset.

Dear Student
a) Cash collected from trade receivables                                    Not Alter
(b) B/R received from trade receivables                                      Not Alter
(c) B/R endorsed to trade payables                                             Improve
(d) B/R dishonoured                                                                     Not Alter
(e) Sale of inventories at par for cash                                          Not Alter
(f) Sale of inventories at profit for cash                                        Not Alter
(g) Sale of inventories at profit on credit                                      Improve
(h) Sale of a fixed asset on a credit of 2 months.                         Reduce
(i) Sale of a fixed asset on long term deferred payment basis.    Not Alter
(j) Issue of new shares against purchase of fixed asset.             Not Alter

Regards