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Current ratio of Vydhehi Pvt. Ltd. Is 3 : 2 accountant wants to maintain it at 2 : 1. Following options are available
(i) He can repay bills payable
(ii) He can purchase goods on credit
(iii) He can take short-term loan
Choose the correct option?

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Only (i) is correct

Only (ii) is correct

Only (i) and (iii) are correct

Only (ii) and (iii) are correct

answer is A.

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Detailed Solution

In order to increase the current ratio the current liabilities needs to be decreased thus he can only replay bills payable. If he purchases goods on credit or takes short term loans it will increase the current liabilities.

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