Current Assets Rs4,00,000; Current Liabi

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Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

Current Assets Rs4,00,000; Current Liabilities Rs2,00,000 and Inventory is Rs50,000. Liquid Ratio will be :

Options:

02:01

2.25 : 1

04:07

1.75 : 1

Correct Answer:

1.75 : 1

Explanation:

Liquid assets = Current Assets Rs4,00,000- and Inventory is Rs50,000
= 350000
Current Liabilities = Rs2,00,000
Liquid Ratio= 350,000/2,00,000
=1.75:1