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WAEC Financial Accounting 2026 Question 48

Question 48

Interpretation of Accounts

Use the following information to answer questions 46 to 48.
Stock: Le 70,000
Creditors: Le 14,000
Debtors: Le 44,000
Accrued income: Le 20,000
Bank overdraft: Le 50,000
The acid test ratio is

  1. A.2.1:1.
  2. B.2:1.
  3. C.1.1:1
  4. D.1:1
Show the answer and explanation

Answer: D (1:1)

Explanation

Quick assets = 134,000 − 70,000 stock = 64,000; current liabilities = 64,000; so 64,000 : 64,000 = 1:1.