Question : Which of the following is the correct answer"
A: Liquid assets can be converted into cash immediately.
B: Machinery can be converted easily in cash by selling it.
 

Option 1: Option A

Option 2: Option B

Option 3: Both of the above

Option 4: None of the above

Question : Which of the following is correct for the Liquid Assets :
(A) Current Assets – Prepaid Expense.
(B) Current Assets – Inventory – Prepaid Expense. 

Option 1: Option A Correct

Option 2: Option B Correct

Option 3: Both are correct

Option 4: None of the above

Question : Which of the following statements is incorrect?

Option 1: The quick ratio indicates whether the firm is in a position to pay its current liabilities within a month or immediately.

Option 2: The quick ratio is calculated by dividing liquid assets (Quick Current Assets) by current liabilities.

Option 3: 'Liquid assets' means those assets which will be converted into cash and cash equivalents very shortly.

Option 4: None of the above

Question : Which of the following statements is incorrect?

Option 1: The quick ratio indicates whether the firm is in a position to pay its current liabilities within a month or immediately.

Option 2: The quick ratio is calculated by dividing liquid assets (Quick Current Assets) by current liabilities.

Option 3: 'Liquid assets' means those assets which will be converted into cash and cash equivalents very shortly.

Option 4: None of the above

Question : Assertion (A): Inventory and pre-paid expenses are not liquid assets.
Reason (R): Liquid assets are those that can quickly be turned into cash or are in the form of cash. Prepaid expenses can be converted into cash, while inventory cannot be transformed into cash quickly. As a result, they are not considered liquid assets.

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: Both Assertion (A) is False and Reason (R) is False.

Question : Which of the following statements is the correct answer?
A: Liquid Assets included stock as well as prepaid expenses.
B: Current Assets included stock as well as prepaid expenses.

Option 1: Option A

Option 2: Option B

Option 3: Both of the above

Option 4: None of the above