Accountancy Assertion and Reason.

Assertion [A] :
If a company has ideal Current Ratio and it further purchased goods on credit, the Current Ratio will decrease.
Reason [R] :
The Ideal Current Ratio of the company is 2:1.
Choose the Correct Option from the following:

Assertion [A] :
Goods sold for Cash at cost price, will not increase the Gross Profit Ratio.
Reason [R] :
Revenue from operation will increase but closing inventory will decrease with the same amount.
Choose the Correct Option from the following:

Assertion [A] :
Debt Equity Ratio of Vinod Ltd. is 2:1. If a Machinery is purchased by the company by issuing 2,00,000 Equity Shares to the Vendors of Machinery, Debt Equity will Decrease.
Reason [R] :
No Change in Debt but Equity is increased.
Choose the Correct Option from the following:

Assertion [A] :
If Current Ratio of a company is 1:1. Its Net working capital will be Zero.
Reason [R]:
When Net Working Capital is Zero, it will reduce the Current Ratio of the Company.
Choose the Correct Option from the following:

Assertion [A] :
If Current Ratio is 2 : 1. Current maturity of long-term debts i.e. Redemption of debentures in the current year, will increase the Current Ratio.
Reason [R]:
Current assets will decrease and there is no impact on current liabilities.
Choose the Correct Option from the following:

Assertion [A] :
While calculating the Current Ratio, Loose Tools and Stores & Spares are not included in the current asset.
Reason [R]:
Loose Tools and Stores & Spares are not held for sale or conversion into cash.
Choose the Correct Option from the following: