Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

At which moment the current ratio and quick ratio be same for the company?

Options:

No prepaid expenses

No inventory

No debtors

No prepaid expenses and inventory

Correct Answer:

No prepaid expenses and inventory

Explanation:

If there are no prepaid expenses and inventory in the business, then-current ratio and the quick ratio will be the same because current assets and liquid assets will be same.