What is the acid test ratio in the company?
| N | N |
| Capital 39,000 | Land 20,000 |
| Long Term Loan 15, 000 | Building 30,000 |
| Creditors 9,000 | Stock 40,000 |
| Debtors 6,000 | |
| Accrued wages 5,000 | Cash 8, 000 |
| 68,000 | 68,000 |
Use the information above to answer the question
What is the acid test ratio in the company?
A 1:1
B 2:3
C 1:2
D 3:2
Answer is A
Acid test ratio: This is a measure of the liquidity position of a company after deduction stock from current assets
Here is the formula: current assets less inventory/current liabilities.
Hence, 18000 – 4000/14000 = 1 : 1
Tag:2018 Jamb Accounting, Jamb, Jamb 2018 accounting questions and answers, Jamb 2018 financial accounting questions and answers, Jamb Accounting, Jamb accounting past questions, Jamb accounting past questions and answers, Jamb Accounts, Jamb financial accounting, Jamb financial accounting questions and answers, Jamb past questions and answers on accounting, Jamb past questions and answers on financial accounting, Joint Admissions and Matriculation Board
