Question : Assertion (A): If Trade Payables are Rs.80,000, Working Capital is Rs.16,00,000, and Current Liabilities are Rs.6,00,000, the Current Ratio will be 2:1.
Reason (R): Current Ratio = Current Assets/Current Liabilities

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4:  Assertion (A) is False and Reason (R) is False.

Question : Assertion (A): If working capital is Rs. 2,40,000, current assets are Rs. 4,000,00, which includes Rs. 2,000 in inventory. There will be a current ratio of 2.5:1.
Reason (R): Current Ratio = Current Assets/Current Liabilities

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Assertion (A) is False and Reason (R) is correct

Question : Assertion: If the Current Ratio is 5: 1, the purchase of goods of Rs.60,000 on credit will reduce the ratio.
Reason (R): Current assets (Goods) and Current Liabilities will both rise as a result of the credit purchase of goods for Rs.50,000. (Creditors). As a result, the Current Ratio will rise.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Assertion (A) is False and Reason (R) is True.

Question : Assertion (A): The ratio that results from dividing current assets by current liabilities is known as the liquid ratio.
Reason (R): Liquid Assets/Current Liabilities is the formula for calculating the liquid ratio.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Assertion (A) is False and Reason (R) is true

Question : Assertion (A): The ratio that results from dividing current assets by current liabilities is known as the liquid ratio.
Reason (R): Liquid Assets/Current Liabilities is the formula for calculating the liquid ratio.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Assertion (A) is False and Reason (R) is true.