Question : Which of the following is correct for working capital : A) Difference between Current Assets and Current Liabilities. B) Difference between Current Assets and Fixed Assets.
Option 1: Only A
Option 2: Only B
Option 3: Both of the above
Option 4: None of the above
Correct Answer: Only A
Solution : A company's current liabilities are deducted from its current assets to determine its working capital. Working capital formulas. Working capital = current assets – current liabilities. Hence, the correct option is 1.
Question : Which of the following tells the working capital?
Option 1: Difference between Current Assets and Fixed Assets
Option 2: Difference between Current Assets and Current Liabilities
Option 3: Difference between Current Liabilities and Current Assets
Option 4: None of the above.
Question : Which of the following statements is incorrect?
Option 1: Working Capital = Current Assets - Current Liabilities
Option 2: Current Liabilities = Total Assets - Non-Current Liabilities - Shareholder's fund
Option 3: Working Capital = Equity Share Capital + Reserves & Surplus - Long Term Loan - Non-Current Assets
Question : Which of the following is the correct formula for "Current Ratio"?
Option 1: Liquid Assets/Current Liabilities
Option 2: Current Assets/Current Liabilities
Option 3: Fixed Assets/Current Assets
Option 4: Liquid Assets/Current Assets
Question : A firm had current assets of Rs.3,00,000 It then paid trade payables of Rs.50,000. After this payment, the current ratio was 2.5:1 The amount of Current Liabilities and Working Capital after the payment are ___________.
Option 1: Current liabilities are Rs 1,50,000 and working capital are Rs 2,10,000
Option 2: Current liabilities are Rs 2,10,000 and working capital are Rs 1,50,000
Option 3: Current liabilities are Rs 1,00,000 and working capital is Rs 1,50,000
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