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Question 10 Chapter 4 of +2-B
I. Liquidity Ratios
10. (Current Ratio & Quick Ratio ) From the following, compute the current ratio and quick ratio.
Trade receivable ₹ 2,00,000 ; Prepaid expenses ₹ 20,000 ; Cash ₹ 60,000 ; Marketable securities ₹ 40,000 ; Machinery ₹ 10,000 ; Expenses payable ₹ 80,000 ; Trade payable ₹ 1,20,000 ; Debentures ₹ 4,00,000 ; Inventories ₹ 80,000.
| Current Assets | = | Trade receivables + Prepaid expenses + Cash + Marketable Securities + Stock |
| = | ₹ 2,00,000 + ₹ 20,000 + ₹ 60,000 + ₹ 40,000 + ₹80,000 | |
| Current Assets | = | ₹ 4,00,000 |
| Current Liabilities | = | Trade payable + Expenses payable |
| = | ₹ 1,20,000 + ₹ 80,000 | |
| Current Liabilities | = | ₹ 2,00,000 |
| Current Ratio= | Current Assets |
| Current Liabilities |
| Current Ratio | = | ₹ 4,00,000 |
| ₹ 2,00,000 | ||
| = | 2 : 1 |
| Quick Assets | = | Current Assets – (Prepaid expenses + Stock) |
| = | ₹ 4,00,000 – (₹ 20,000 + ₹80,000) | |
| Quick Assets | = | ₹ 3,00,000 |
| Current Liabilities | = | ₹ 2,00,000 |
| Quick Ratio | = | Quick Assets |
| Current Liabilities | ||
| = | ₹ 3,00,000 | |
| ₹ 2,00,000 | ||
| Quick Ratio | = | 1.5: 1 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question 10 Chapter 4 of +2-B - USHA Publication 12 Class", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication Part 2 volume I.
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