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Question 1 Chapter 4 of +2-B
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Table of Contents
Current Ratio and Quick Ratio
1. From the following, compute Current Ratio:
| Amount | Amount | ||
| Trade Receivables (Sundry Debtors) | 1,80,000 | Bills Payable | 20,000 |
| Prepaid Expenses | 40,000 | Sundry Creditors | 1,00,000 |
| Cash and Cash Equivalents | 50,000 | Debentures | 4,00,000 |
| Marketable Securities | 50,000 | Inventories | 80,000 |
| Land and Building | 5,00,000 | Expenses Payable | 80,000 |
Hint: Marketable Securities means the Short-term Investment.
The solution of Question 1 Chapter 4 of +2-B: –
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| Current Assets= | Trade Receivables + Pre-paid Expenses + Cash and Cash Equivalents + Marketable Securities + Inventories |
| = | Rs. 1,80,000 + Rs. 40,000 + Rs. 50,000 + Rs. 50,000 + Rs. 80,000 |
| Current Assets= | Rs. 4,00,000 |
| Current Liabilities= | Bills Payable + Sundry Creditors + Expenses Payable |
| Current Liabilities= | Rs. 20,000 + Rs.1,00,000 + Rs.80,000 |
| Current Liabilities= | Rs. 2,00,000 |
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| Current Ratio= | Current Assets |
| Current Liabilities |
| Current Ratio= | |
Current Ratio=2:1
Balance Sheet: Meaning, Format & Examples
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Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
