{"id":58392,"date":"2024-04-16T01:18:42","date_gmt":"2024-04-16T01:18:42","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=58392"},"modified":"2024-04-16T01:18:42","modified_gmt":"2024-04-16T01:18:42","slug":"given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/","title":{"rendered":"Given, Cash Rs. 10,000 Creditors Rs. 12,000 Debitors Rs. 20,000 Bills payable Rs. 8,000 Stock Rs. 30,000 Bank loan Rs. 10,000 If bank loan is increased by Rs. 20,000. the current ratio will decrease by"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a97072ba19e4\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"true\">\r\n                    20%                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    25%                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    30%                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    40%                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is A. 20%.<\/p>\n<p>Current ratio is a measure of a company&#8217;s liquidity. It is calculated by dividing current assets by current liabilities. A higher current ratio indicates that a company is more liquid and has more assets that can be converted into cash quickly to pay off its debts.<\/p>\n<p>In this case, the current ratio is 2.5, which is considered to be a good ratio. If the bank loan is increased by Rs. 20,000, the current ratio <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> will decrease to 2. The decrease in current ratio is due to the fact that the increase in bank loan is a current liability, while the increase in cash is not a current asset.<\/p>\n<p>The decrease in current ratio is not necessarily a bad thing, as it may be due to the company taking on more debt to finance its growth. However, it is important to monitor the current ratio over time to ensure that it does not fall too low. A low current ratio may indicate that the company is having difficulty meeting its short-term obligations.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: 20%. This is the correct answer. The current ratio will decrease by 20% if the bank loan is increased by Rs. 20,000.<\/li>\n<li>Option B: 25%. This is incorrect. The current ratio will decrease by 20%, not 25%.<\/li>\n<li>Option C: 30%. <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> This is incorrect. The current ratio will decrease by 20%, not 30%.<\/li>\n<li>Option D: 40%. This is incorrect. The current ratio will decrease by 20%, not 40%.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"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>Given, Cash Rs. 10,000 Creditors Rs. 12,000 Debitors Rs. 20,000 Bills payable Rs. 8,000 Stock Rs. 30,000 Bank loan Rs. 10,000 If bank loan is increased by Rs. 20,000. the current ratio will decrease by<\/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\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Given, Cash Rs. 10,000 Creditors Rs. 12,000 Debitors Rs. 20,000 Bills payable Rs. 8,000 Stock Rs. 30,000 Bank loan Rs. 10,000 If bank loan is increased by Rs. 20,000. the current ratio will decrease by\" \/>\n<meta property=\"og:description\" content=\"Subscribe on YouTube\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-16T01:18:42+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Given, Cash Rs. 10,000 Creditors Rs. 12,000 Debitors Rs. 20,000 Bills payable Rs. 8,000 Stock Rs. 30,000 Bank loan Rs. 10,000 If bank loan is increased by Rs. 20,000. the current ratio will decrease by","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\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/","og_locale":"en_US","og_type":"article","og_title":"Given, Cash Rs. 10,000 Creditors Rs. 12,000 Debitors Rs. 20,000 Bills payable Rs. 8,000 Stock Rs. 30,000 Bank loan Rs. 10,000 If bank loan is increased by Rs. 20,000. the current ratio will decrease by","og_description":"Subscribe on YouTube","og_url":"https:\/\/exam.pscnotes.com\/mcq\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-16T01:18:42+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/","url":"https:\/\/exam.pscnotes.com\/mcq\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/","name":"Given, Cash Rs. 10,000 Creditors Rs. 12,000 Debitors Rs. 20,000 Bills payable Rs. 8,000 Stock Rs. 30,000 Bank loan Rs. 10,000 If bank loan is increased by Rs. 20,000. the current ratio will decrease by","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2024-04-16T01:18:42+00:00","dateModified":"2024-04-16T01:18:42+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/given-cash-rs-10000-creditors-rs-12000-debitors-rs-20000-bills-payable-rs-8000-stock-rs-30000-bank-loan-rs-10000-if-bank-loan-is-increased-by-rs-20000-the-current-ratio-will-decrease-b\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"mcq","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/"},{"@type":"ListItem","position":3,"name":"accounting","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/mcq\/accounting\/"},{"@type":"ListItem","position":4,"name":"Given, Cash Rs. 10,000 Creditors Rs. 12,000 Debitors Rs. 20,000 Bills payable Rs. 8,000 Stock Rs. 30,000 Bank loan Rs. 10,000 If bank loan is increased by Rs. 20,000. the current ratio will decrease by"}]},{"@type":"WebSite","@id":"https:\/\/exam.pscnotes.com\/mcq\/#website","url":"https:\/\/exam.pscnotes.com\/mcq\/","name":"MCQ and Quiz for Exams","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/exam.pscnotes.com\/mcq\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209","name":"rawan239","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/d97f17072bfa490596c8f78363955d55?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/d97f17072bfa490596c8f78363955d55?s=96&d=mm&r=g","caption":"rawan239"},"sameAs":["https:\/\/exam.pscnotes.com"],"url":"https:\/\/exam.pscnotes.com\/mcq\/author\/rawan239\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/58392"}],"collection":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/comments?post=58392"}],"version-history":[{"count":0,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/posts\/58392\/revisions"}],"wp:attachment":[{"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/media?parent=58392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/categories?post=58392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/exam.pscnotes.com\/mcq\/wp-json\/wp\/v2\/tags?post=58392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}