Question : Assertion (A): Current Ratio = Current Assets- Stock /Current Liabilities
Reason (R): If current Assets are 5,25,000, including inventory of 2,00,000 (including Loose Tools 75,000) and working capital is 2,25,000, Current Ratio will be 1.5 : 1

 

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False
 

Option 4: Assertion (A) is False and Reason (R) is correct.

Question : Assertion (A): If current Assets are 5,25,000, including inventory of 2,00,000 (including Loose Tools 75,000) and working capital is 2,25,000, Current Ratio will be 1.83 : 1
Reason (R): Current Ratio = Current Assets/Current Liabilities

Question : Assertion (A): Current Assets/Current Liabilities is the formula for calculating the current ratio
Reason (R): The current ratio is derived by dividing current assets by current liabilities. Current assets are made up of spare parts, loose tools, and stores.

Question : Assertion (A): Current Ratio is calculated by dividing liquid assets by current liabilities and current assets include loose tools, stores, and spares, and provision for doubtful debts.
Reason (R): The formula for the Current Ratio is Current Assets/Current Liabilities.

Question : Assertion (A): If working capital is 2,40,000, current assets are 4,000,00, which includes 2,000 in inventory.
There will be a current ratio of 2.5:1.
Reason (R): Current Ratio = Current Assets/Current Liabilities

Question : Assertion (A): The ratio that results from dividing current assets by current liabilities is known as the liquid ratio.
Reason (R): Liquid Assets/Current Liabilities is the formula for calculating the liquid ratio.