Read the information carefully and answer the questions.
| Particulars | Amount (₹) |
| Inventories | 50,000 |
| Trade Receivables | 50,000 |
| Advance Tax | 4,000 |
| Cash and Cash Equivalents | 30,000 |
| Trade Payables | 1,00,000 |
| Bank overdraft | 4,000 |
Quick Ratio of the firm is:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 0.77:1
The quick (acid-test) ratio is a stricter test of liquidity than the current ratio: it compares only the quick assets with the current liabilities, leaving out inventories and advance tax.
Quick Ratio = Quick Assets ÷ Current Liabilities
Quick Assets = Rs. 1,34,000 − (Rs. 50,000 + Rs. 4,000) = Rs. 80,000
Current Liabilities = Rs. 1,00,000 + Rs. 4,000 = Rs. 1,04,000
Quick Ratio = Rs. 80,000 ÷ Rs. 1,04,000 = 0.77:1
Keeping advance tax in quick assets gives Rs. 84,000 ÷ Rs. 1,04,000 = 0.81:1, which is not the book’s treatment.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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