A-LevelAccountingAnalysis and communication of accounting information9706/12 · Oct/Nov 2012 · Q221 Mark

A company has a current ratio of 2:1. Which transactions would always increase the ratio? 1 buying goods on credit 2 debtors paying their account to us 3 converting an overdraft to a long-term bank loan 4 selling non-current assets for cash

A1 and 2

B1 and 3

C2 and 3

D3 and 4

✓ Correct answer

D: 3 and 4

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Topic: Analysis and communication of accounting information, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2012 Paper 1 Variant 2, question 22.

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