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Would really aprreciate it if you help me out in Accounting
- Thread starter Sijan92
- Start date
Re: Would really aprreciate it if you help me out in Account
for q.no.19,
let current assets=200, current liabilities=100, stock=50
current ratio= ca/cl = 200/100 = 2
acid test= ca - stock / cl = 200-50/100 = 1.5
if stock of 50 is bought on credit, ca=250, cl=150, stock=100
current ratio= 250/150 = 1.67
acid test = 250-100 / 150 = 1
both decrease
(option c also seems correct but only if ca=cl)
for q.no.19,
let current assets=200, current liabilities=100, stock=50
current ratio= ca/cl = 200/100 = 2
acid test= ca - stock / cl = 200-50/100 = 1.5
if stock of 50 is bought on credit, ca=250, cl=150, stock=100
current ratio= 250/150 = 1.67
acid test = 250-100 / 150 = 1
both decrease
(option c also seems correct but only if ca=cl)
. and any idea on question 20?Re: Would really aprreciate it if you help me out in Account
for question 20,
gross profit is 40% of sales, so cost of sales is 60% of sales, the mark up is (66.67%)
when sales volume increases by 8%, the cost of sales will also increase proportionately, so no change in gross profit to sales ratio
but the net profit comes only after reducing many overheads which can be fixed or variable, in this case it doesn't change, so net profit to sales ratio increases
for question 20,
gross profit is 40% of sales, so cost of sales is 60% of sales, the mark up is (66.67%)
when sales volume increases by 8%, the cost of sales will also increase proportionately, so no change in gross profit to sales ratio
but the net profit comes only after reducing many overheads which can be fixed or variable, in this case it doesn't change, so net profit to sales ratio increases