A firm had a Current Assets of ₹ 4,00,000. It then paid a current liability of ₹ 80,000. After this payment the current ratio was 2 :1.
Answer the following
1. How much is Current liabilities after payment of ₹ 80,000?
i) ₹ 3,20,000
ii) ₹ 1,60,000
iii) ₹ 80,000
iv) ₹ 2,00,000
2. Determine working capital before and after payment of ₹ 80,000?
i) ₹ 3,20,000 and ₹ 1,60,000
ii) ₹ 3,20,000 and ₹ 3, 20,000
iii) ₹ 1,60,000 and ₹ 1,60,000
iv) ₹ 2,40,000 and ₹ 1,60,000
3. Liquid asset does not include the following
i) Trades receivables
ii) Short term loans and advances
iii) Inventory and pre-paid expenses
iv) Current investments
4. What is the ideal current ratio and quick ratio?
i) 3 : 1 and 2 : 1
ii) 2 : 1 and 1 : 1
iii) 1 : 1 and 2 : 1
iv) 2 : 1 and 2 : 1
