passwella.
Menu

WAEC Financial Accounting 2013 Question 10

Question 10

Interpretation of Accounts

Use the following information to answer questions 10 to 12.
Net profit: ₦60,000
Total assets: ₦520,000
Current liabilities: ₦150,000
Current assets: ₦280,000
The current ratio is

  1. A.1.87 : 1.
  2. B.1 : 1.87.
  3. C.1 : 2.
  4. D.2 : 1.
Show the answer and explanation

Answer: A (1.87 : 1.)

Explanation

Current ratio = current assets ÷ current liabilities = 280,000 ÷ 150,000 = 1.87, i.e. 1.87 : 1.