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12th Class Accountancy Accounting Ratios Question Bank MCQs - Accounting Ratios

  • question_answer
    If current ratio is 2.5 :1 and current liabilities Rs. 4,00,000. Its working capital will be:

    A) Rs. 6,00,000     

    B) Rs. 7,50,000

    C) Rs. 8,00,000     

    D) Rs. 14,00,000

    Correct Answer: A

    Solution :

    [a] Rs. 6,00,000
        2.5     CA
    Hint: Current Ratio =\[\frac{Current Assets}{Current Liabilities}\]=>\[\frac{2.5}{1}\]=\[\frac{\operatorname{CA}}{4,00,000}\]
    Current Assets = 2.5 \[\times \] 4,00,000 = Rs.10,00,000
    Working Capital = Current Assets - Current Liabilities
    =10,00,000 - 4,00,000 = Rs. 6,00,000


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