Multiple choice

In case of dishonour of bills receivable what effect will it have on current ratio?

  1. Decrease in current asset and increase in current liability with same amount.

  2. Nil effect.

  3. Increase in current assets and increase in current liability with same amount.

  4. Decrease in current assets and decrease in current liability.

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

There will be no effect on current assets and current liabilities. So the effect will be nil. 

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