Question 16 Chapter 4 of +2-B
Table of Contents
Current Ratio and Quick Ratio
16. Quick Assets Rs. 1,50,000; Inventories (Stock) 40,000; Prepaid Expenses Rs. 10,000; Working Capital Rs. 1,20,000.Calculate Current Ratio.
The solution of Question 16 Chapter 4 of +2-B: –
| Quick Assets | = | Rs.1,50,000 |
| Inventory | = | Rs.40,000 |
| Prepaid Expenses | = | Rs.10,000 |
| Current Assets | = | Quick Assets + Inventory + Prepaid Expenses |
| = | Rs.1,50,000 + Rs.40,000 + Rs.10,000 | |
| = | Rs.2,00,000 |
| Working Capital | = | Current Assets – Current Liabilities |
| Rs.1,20,000 | = | Rs.2,00,000 – Current Liabilities |
| Current Liabilities | = | Rs.80,000 |
| Current Ratio | = | Current Assets |
| Current Liabilities |
| = | 2,00,000 | |
| 80,000 |
Quick Ratio or Liquid Ratio=2.5 : 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
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