The current Ratio of a firm is 2.5: 1 an

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Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

The current Ratio of a firm is 2.5: 1 and its Current Liabilities are ₹4,00,000 of a company. What will be its current assets?

Options:

₹100000

₹1000000

₹200000

₹250000

Correct Answer:

₹1000000

Explanation:

Current ratio = Current assets/ Current liabilities
Current ratio = 2.5:1
CA/CL = 2.5/1
CA/400000= 2.5/1
CA = 400000 X 2.5
CA= ₹1000000