Calculate the 'Liquid Ratio' from the following information:ItemsValue (Rs.)Current liabilities50,000Current assets80,000Inventories20,000Advance tax5 - Accountancy MCQ CUET Accountancy 2025 27 May Shift 2 2026 | ExamTest.live

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1 mark

Calculate the 'Liquid Ratio' from the following information:ItemsValue (Rs.)Current liabilities50,000Current assets80,000Inventories20,000Advance tax5,000Prepaid expenses5,000

Solution & Step-by-step Explanation

Step 1: Compute Liquid Assets. Liquid Assets = Current Assets - (Inventories + Advance Tax + Prepaid Expenses) Liquid Assets = 80, 000 - (20, 000 + 5, 000 + 5, 000) Liquid Assets = 80, 000 - 30, 000 = Rs. 50, 000 Step 2: Calculate the Liquid Ratio. Liquid Ratio = \frac{Liquid Assets}{Current Liabilities} Liquid Ratio = \frac{50 , 000}{50 , 000} = 1 : 1

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Calculate the 'Liquid Ratio' from the following information:ItemsValue (Rs.)Current liabilities50,000Current assets80,000Inventories20,000Advance tax5,000Prepaid expenses5,000

0.5:1

0.2:1

1:1

0.8:1

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