📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!


    Question

    A general insurance company has the following balances:

    Current Assets = ₹12 lakh, Inventories = ₹2 lakh, Bank overdraft = ₹1.5 lakh, Other Current Liabilities = ₹4.5 lakh. Calculate the Adjusted Quick Ratio (Acid Test Ratio).
    A 2.0 Correct Answer Incorrect Answer
    B 1.2 Correct Answer Incorrect Answer
    C 1.5 Correct Answer Incorrect Answer
    D 1.6 Correct Answer Incorrect Answer
    E 1.0 Correct Answer Incorrect Answer

    Solution

    Quick Assets = Current Assets – Inventory = ₹12 lakh – ₹2 lakh = ₹10 lakh Current Liabilities = Bank overdraft + Other CL = ₹1.5 lakh + ₹4.5 lakh = ₹6 lakh Quick Ratio = 10 / 6 = 1.67 → approx 1.6

    Practice Next
    ask-question

    Not sure which exam is best for you Talk to our expert

    Get My Free Call