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Question
From the following information obtained from the books of accounts of Ananda Ltd., calculate ‘Quick Ratio’ of the company:
Total Current Assets (including stock and prepaid expenses) ₹ 2,00,000; Stock ₹ 20,000; Prepaid expenses ₹ 10,000; Current liabilities ₹ 1,70,000.
Options
20 : 17
1 : 1
18 : 17
19 : 17
MCQ
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Solution
1 : 1
Explanation:
Quick Assets = Current Assets − Stock − Prepaid Expenses
= ₹ 2,00,000 − ₹ 20,000 − ₹ 10,000
= ₹ 1,70,000
Quick Ratio = Quick Assets : Current Liabilities
= ₹ 1,70,000 : ₹ 1,70,000
= 1 : 1
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