Debt-Equity Ratio uses long-term debt and shareholders funds. Payment to creditors affects only current liabilities, leaving both debt and equity unchanged, so the ratio stays the same. The other transactions change debt, equity, or both.
Aradya Ltd. had debt equity ratio of 2.5 : 1. State which of the following transaction will not effect the Debt Equity Ratio :
CUET UG 2023 — Accountancy Financial Statements
2023mcqmedium
Aradya Ltd. had debt equity ratio of 2.5 : 1. State which of the following transaction will not effect the Debt Equity Ratio :
Official previous-year question
Held on 28 May 2023 · Verified 13 Jul 2026.
Options
- A
Purchase of Rs. 15,00,000 machinery by taking bank loan of Rs. 12,00,000
- B
Rs. 2,00,000 paid to creditors
- C
Conversion of Rs. 1,00,000 debentures into Equity shares of Rs. 100 each
- D
Sale of furniture (book value of Rs. 5,00,000) for Rs. 5,50,000
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