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Standard XII

Accountancy

Acid Test Ratio

Which of the ...

Question

Which of the following liabilities are taken into account for acid test ratio?
(i) Trade creditors
(ii) Bank overdraft
(iii) Cash credit
(iv) Outstanding expenses

i & ii

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i & iv

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i, ii, iii & iv

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ii, iii & iv

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Solution

The correct option is B i, ii, iii & iv
Acid test ratio = quick assets / current liabilities. All current liabilities are considered while calculating acid test ratio.

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Q. On which side will the decrease in the following accounts be recorded? Also, state the nature of the account:

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Q. Which of the following are current liabilities?
(I) Creditors
(II) Unexpired Insurance
(III) Bank overdraft
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Q. If

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The following is the summerised transactions and Statement of Profit and Loss Account for the year ending March 31, 2007 and the Balance Sheet as on the basis of following information, calculate:

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Gross Profit	50,000
Revenue from Operations	1,00,000
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Which of the following liabilities are taken into account for acid test ratio?(i) Trade creditors(ii) Bank overdraft(iii) Cash credit(iv) Outstanding expenses

The correct option is B i, ii, iii & ivAcid test ratio = quick assets / current liabilities. All current liabilities are considered while calculating acid test ratio.

Which of the following liabilities are taken into account for acid test ratio?
(i) Trade creditors
(ii) Bank overdraft
(iii) Cash credit
(iv) Outstanding expenses

The correct option is B i, ii, iii & iv
Acid test ratio = quick assets / current liabilities. All current liabilities are considered while calculating acid test ratio.