Accounting 0452 · IGCSE · Calculation and understanding of accounting ratios

Calculation and understanding of accounting ratios — practice question

Sally’s business has already used up the bank overdraft limit of $1500$ and cannot settle its debts when they become due. Sally is thinking about these proposals. 1. requesting the bank to raise the bank overdraft limit to $2000$ 2. taking $2000$ from a relative as a loan and repaying it after six months 3. arranging a bank loan of $2000$ to be repaid in two years 4. transferring $2000$ from Sally’s personal bank account into the business bank account Which proposals would increase the working capital of the business?

  • A1 and 2
  • B1 and 4
  • C2 and 3
  • D3 and 4

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