New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    In order to calculate (1) _______ ratio what needs to be

    deducted (2) _______?
    A Current; Prepaid expense Correct Answer Incorrect Answer
    B Quick; Stock Correct Answer Incorrect Answer
    C Current; Debtors Correct Answer Incorrect Answer
    D Quick; Debtors Correct Answer Incorrect Answer
    E Current; Cash & cash equivalents Correct Answer Incorrect Answer

    Solution

    The Quick Ratio focuses on the most liquid current assets by excluding inventory, which is not as readily convertible to cash, offering a stringent test of liquidity. While calculating quick assets we deduct Stock & Prepaid expenses from current assets.

    Practice Next

    Relevant for Exams: