Question
Calculate quick ratio: Total current liabilities ₹ 2,40,000; total current assets ₹ 4,50,000; Inventories ₹ 70,000; Prepaid Expenses ₹ 20,000
Quick assets = Current Assets – Inventories & Prepaid exps.
= 4,50,000 – (70,000 + 2000)
= Rs. 3,60,000
Quick Ratio = $\frac{360000}{240000}$
Quick Ratio = 1. 5 : 1
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Short Answer Question
State the meaning of financial statements?
| Particulars | Amount Rs. |
| Revenue from operations | 9,60,000 |
| Cost of revenue from operations | 5,50,000 |
| Office and administration expenses | 1,45,000 |
| Selling and distribution expenses | 25,000 |
| Statement of Profit and Loss | |
| Particulars | ₹ |
| $I.$ Revenue from operations | $24,00,000$ |
| $II.$ Other income: | |
| Income from investment | $70,000$ |
| $III.$ Total revenues $(I+II)$ | $24,70,000$ |
| $IV.$ Expenses: | |
| Purchases of stock$-$in$-$trade | $18,80,000$ |
| Changes in inventories | $-80,000$ |
| Employee benefits expense | $2,90,000$ |
| Other expenses | $1,10,000$ |
| Provision for tax | $30,000$ |
| Total expenses | $22,30,000$ |
| V. Profit for year | $2,40,000$ |
| Particulars | ₹ |
| Capital as on $1^{st} $ January, $2018$ | $1,00,000$ |
| Goods withdrawn for personal use by the owner | $30,000$ |
| Additional capital introduced during the year | $15,000$ |
| Profit for the year | $60,000$ |