A firm's current ratio is 2.5:1. If current assets are ₹5,00,000, current liabilities are: MCQ with Answer and Explanation

Question
A firm's current ratio is 2.5:1. If current assets are ₹5,00,000, current liabilities are:
A. ₹2,50,000
B. ₹5,00,000
C. ₹1,25,000
D. ₹2,00,000
Answer: Option D
Solution (By JKSSB Mock Tests)
2.5 = 5,00,000 / CL => CL = 5,00,000 / 2.5 = ₹2,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
In a Cash Book with discount columns, the total of the 'Discount Received' column is posted to the:
A. Debit of Discount Received A/c
B. Debit of Creditors A/c
C. Credit of Cash A/c
D. Credit of Discount Received A/c
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Correct Answer: Option D

Explanation:
Discount Received is a gain (nominal account rule: credit all gains), so the periodic total is posted to the credit side of the Discount Received ledger account.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The 'Life Cycle Costing' considers costs:
A. Only fixed costs
B. From product design to disposal
C. Only variable costs
D. Only during manufacturing
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Correct Answer: Option B

Explanation:
Life cycle costing tracks costs from research and development to after-sales service and disposal.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Government Grant' (Ind AS 20) related to income is recognised:
A. In profit or loss on a systematic basis over the periods in which the entity recognises the related costs
B. Immediately as income
C. When received
D. As deferred income always
Discuss
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Correct Answer: Option A

Explanation:
Grants are recognised in P&L over the periods necessary to match them with the related costs.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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