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Question
Quick Ratio of Roxy Traders is 0.8 : 1. State with reasons whether the following transaction will increase, decrease or will have no change on the ratio.
Outstanding Expenses paid
Give Reasons
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Solution
Ratio will decrease
Reason:
Both Quick Assets (Cash) and Current Liabilities (Outstanding Expenses) will decrease.
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2025-2026 (March) Board Sample Paper - Analysis of Financial Statements
