{"id":47640,"date":"2024-04-15T22:29:41","date_gmt":"2024-04-15T22:29:41","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=47640"},"modified":"2024-04-15T22:29:41","modified_gmt":"2024-04-15T22:29:41","slug":"the-debt-equity-ratio-of-a-company-is-2-1-in-this-relation-match-the-following-list-i-list-ii-a-issue-of-equity-shares-1-no-change-on-the-ratio-b-cash-received-from-debtors-2-reduce-the-ratio","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-debt-equity-ratio-of-a-company-is-2-1-in-this-relation-match-the-following-list-i-list-ii-a-issue-of-equity-shares-1-no-change-on-the-ratio-b-cash-received-from-debtors-2-reduce-the-ratio\/","title":{"rendered":"The debt-equity ratio of a company is 2 : 1. In this relation, match the following. List-I List-II a. Issue of equity shares 1. No change on the ratio b. Cash received from debtors 2. Reduce the ratio c. Redemption of debentures 3. No change on the ratio d. Purchased goods on credit 4. Reduce the ratio"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;a-1, b-2, c-3, d-4&#8243; option2=&#8221;a-4, b-3, c-2, d-1&#8243; option3=&#8221;a-4, b-1, c-2, d-3&#8243; option4=&#8221;a-4, b-2, c-1, d-3&#8243; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>A. a-1, b-2, c-3, d-4<\/strong><\/p>\n<ul>\n<li><strong>a. Issue of equity shares<\/strong><\/li>\n<\/ul>\n<p>Equity shares are a type of ownership in a company. When a company issues new equity shares, it is essentially selling a piece of itself to investors. This increases the company&#8217;s equity, which is the difference between its assets and liabilities. The debt-equity ratio is calculated by dividing the company&#8217;s debt by its equity. Therefore, issuing equity shares will reduce the debt-equity ratio.<\/p>\n<ul>\n<li><strong>b. Cash received from debtors<\/strong><\/li>\n<\/ul>\n<p>Debtors are customers who owe money to the company. When a company collects cash from debtors, it increases its cash balance. This does not affect the company&#8217;s debt or equity, so it does not affect the debt-equity ratio.<\/p>\n<ul>\n<li><strong>c. Redemption of debentures<\/strong><\/li>\n<\/ul>\n<p>Debentures are a type of loan that a company takes out from investors. When a company redeems debentures, it pays back the loan to the investors. This reduces the company&#8217;s debt, which will reduce the debt-equity ratio.<\/p>\n<ul>\n<li><strong>d. Purchased goods on credit<\/strong><\/li>\n<\/ul>\n<p>When a company purchases goods on credit, it is essentially borrowing money from the supplier. This increases the company&#8217;s debt, which will increase the debt-equity ratio.<\/p>\n<p>Therefore, the correct answer is: <strong>A. a-1, b-2, c-3, d-4<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;a-1, b-2, c-3, d-4&#8243; option2=&#8221;a-4, b-3, c-2, d-1&#8243; option3=&#8221;a-4, b-1, c-2, d-3&#8243; option4=&#8221;a-4, b-2, c-1, d-3&#8243; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-47640","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The debt-equity ratio of a company is 2 : 1. In this relation, match the following. List-I List-II a. Issue of equity shares 1. No change on the ratio b. Cash received from debtors 2. Reduce the ratio c. Redemption of debentures 3. No change on the ratio d. Purchased goods on credit 4. Reduce the ratio<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-debt-equity-ratio-of-a-company-is-2-1-in-this-relation-match-the-following-list-i-list-ii-a-issue-of-equity-shares-1-no-change-on-the-ratio-b-cash-received-from-debtors-2-reduce-the-ratio\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The debt-equity ratio of a company is 2 : 1. In this relation, match the following. List-I List-II a. Issue of equity shares 1. No change on the ratio b. Cash received from debtors 2. Reduce the ratio c. Redemption of debentures 3. No change on the ratio d. Purchased goods on credit 4. 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In this relation, match the following. List-I List-II a. Issue of equity shares 1. No change on the ratio b. Cash received from debtors 2. Reduce the ratio c. Redemption of debentures 3. No change on the ratio d. Purchased goods on credit 4. Reduce the ratio","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/the-debt-equity-ratio-of-a-company-is-2-1-in-this-relation-match-the-following-list-i-list-ii-a-issue-of-equity-shares-1-no-change-on-the-ratio-b-cash-received-from-debtors-2-reduce-the-ratio\/","og_locale":"en_US","og_type":"article","og_title":"The debt-equity ratio of a company is 2 : 1. In this relation, match the following. List-I List-II a. Issue of equity shares 1. No change on the ratio b. Cash received from debtors 2. Reduce the ratio c. Redemption of debentures 3. No change on the ratio d. 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