Current Ratio

Q.

Current assets divided by current liabilities is the ___

1. Current ratio

2. Net worth ratio

3. Working capital

4. None of these

Q.

The current ratio of a company is 2.5:1. Which of the following transactions would not change it?

1. Payment to trade creditors

2. Selling machinery for cash

3. Purchase of goods on credit

4. Issue of equity shares

Q.

The ideal level of current ratio is___

1. 4:2

2. 2:1

3. 4:2 or 2:1

4. None of these

Q.

Which of the following is not a current asset?

1. Inventory

2. Prepaid insurance

3. Fixtures

4. None of these

Q.

Which ratio is considered as safe margin of solvency?

1. Quick ratio

2. Current ratio

3. None of these

4. Liquid ratio

Q.

Quick ratio is 1.8 : 1, current ratio is 2.7 : 1 and current liabilities are Rs 60, 000. Determine value of stock.

1. Rs 54, 000

2. Rs 60, 000

3. Rs 1, 62, 000

4. None of these

Q.

Current ratio is stated as a crude ratio because ___

1. It measures only the quantity of current assets

2. It measures only the quality of current assets

3. Both:

   It measures only the quantity of current assets

   It measures only the quality of current assets

4. None of these

Q. The optimal current ratio is .

1. 1:1
2. 2:1
3. 1:2
4. 1:4

Q. Current assets divided by current liabilities is the ratio.

1. liquid
2. non-current
3. fixed
4. current

Q. A current ratio of 1:2 is considered ideal.

1. False
2. True