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JAMB Principles of Accounts 2017 Question 9

Question 9

Interpretation of Accounts

Use the information below to answer questions 9 and 10.
Zoom Plc balance sheet [extract] as at 31st December, 1997 (shown in the figure).

The quick ratio is

Diagram for this question
  1. A.0.95:1
  2. B.0.82:1
  3. C.1:53:1
  4. D.0.91:1
Show the answer and explanation

Answer: B (0.82:1)

Explanation

Quick assets = debtors (net) 87,000 + cash 60,000 + bank 100,000 = ₦247,000. Current liabilities = creditors 200,000 + other 100,000 = ₦300,000. 247,000 ÷ 300,000 ≈ 0.82:1.