Question : Items excluded from Current Assets while calculating the current ratio are
Option 1: Loose Tools
Option 2: Stores and Spares
Option 3: Provision for Doubtful Debts
Option 4: All of the above
Correct Answer: All of the above
Solution : Answer = All of the above
All of the above items, Loose Tools, Stores and Spares, and Provision for Doubtful Debts, are excluded from current assets when calculating the current ratio. These items are not readily convertible to cash within the short term. Hence, the correct option is 4.
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 : ---------------------ratio explains the relationship between current assets and current liabilities of a business.
Question : Working Capital Rs.6,30,000; Current Assets Rs.8,40,000 and Inventory Rs.3,00,000 (including Loose Tools Rs. 1,05,000). The current ratio will be
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