State one transaction which result in a decrease in "debt-equity ratio" and no change in "Current Ratio".

To answer this question, we need to take a step back and just classify the elements of "Debt Equity Ratio" & "Current Ratio". "Debt-Equity ratio" is relationship between Debts & Own capital(does not include any currentliabilities) on the other side the current ratio is showing relationship between Current Assets vis-a-vis CurrentLiabilities. Every transaction that we record in books of accounts impact two accounts and iftransactionsimpact the accounts lying inabove categoriesit will certainly impact the ratio as well. Let’s see, Settlement of Long Term Liabilities from issue of Share Capital decreases the Debt Equity ratio being debt reduced & Capital increased however the amount came in bank via issue of capital got paid to long term liabilities so no impact on current ratio. read less