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WAEC Financial Accounting 2007 Question 37

Question 37

Interpretation of Accounts

Premises N100,000
Plant N50,000
Fixtures N30,000
Stock N20,000
Debtors N10,000
Cash N10,000
Creditors N20,000
Current ratio is

  1. A.4:1
  2. B.3:1
  3. C.2:1
  4. D.1:1.
Show the answer and explanation

Answer: C (2:1)

Explanation

40,000 ÷ 20,000 = 2 : 1.