Practicing Success
There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below. Assertion (A): Current assets when divided by Current Liabilities, the ratio which comes out is termed as Liquid Ratio. |
Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A). Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A). Assertion (A) is not correct but the Reason (R) is correct. Only Assertion (A) is correct. |
Assertion (A) is not correct but the Reason (R) is correct. |
The correct answer is option 3- Assertion (A) is not correct but the Reason (R) is correct. Assertion (A): Current assets when divided by Current Liabilities, the ratio which comes out is termed as Liquid Ratio- THIS IS FALSE because when Current assets are divided by Current Liabilities, the ratio which comes out is termed as current Ratio. Reason (R): The formula for the Liquid Ratio is Liquid Assets/Current Liabilities. THIS IS TRUE. |