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
Correct Answer: Option B
Solution : The word "liquid assets" refers to assets that can be quickly converted into cash, such as cash on hand, accounts receivable, various debtors, and short-term investments. However, it excludes inventories and pre-paid expenses. The cash balance, bills receivable, various debtors, short-term investments, as well as prepaid expenses and inventories, were all included in the list of current assets. Option 2 is the correct answer.
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
Question : Current Assets 95,000; Inventory 32,000; Prepaid Expenses 3,000. Then liquid assets will be :
Option 1: 107000
Option 2: 60000
Option 3: 63000
Question : The Current Liabilities of a Company are Rs.7,00,000. Its current ratio is 3.5: 1 and its acid test ratio is 1.5: 1. The value of Current assets, Liquid assets and Inventories are
Option 1: Current assets 10,50,000. Liquid assets 6,12,500. Stock 4,37,500
Option 2: Current assets 10,50,000. Liquid assets 6,22,500, stock 4,27,500
Option 3: Current assets 6,22,500. Liquid assets Rs 10,50,000. Stock 4,27,500
Option 4: Current assets24,50,000, liquid assets 10,50,000. Stock 14,00,000
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
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