Practicing Success
There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below. Assertion (A): The Current Ratio is calculated by dividing Current Assets by Total Liabilities and Current Assets include Loose Tools, Stores & Spares, and Provision for Doubtful Debts. |
Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A) Both Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A) Both are incorrect Only Assertion (A) is correct |
Both are incorrect |
The correct answer is option 3- Both are incorrect. Assertion (A): The Current Ratio is calculated by dividing Current Assets by Total Liabilities and Current Assets include Loose Tools, Stores & Spares, and Provision for Doubtful Debts. THIS IS FALSE as current ratio is calculated by dividing current assets with current liabilities. * Current ratio is the proportion of current assets to current liabilities. It is expressed as follows: |