Test Index

JAMB Commerce 2015 Paper

Question : 1

Total: 50

What is the acid ratio?

Solution:

Concept:

Acid test ratio compares quick assets (current assets minus stock) with current liabilities.

Explanation:

Non-current assets = Plant + Motor van =

5000 + 4500 = 9500

Total assets =

14100

; therefore, current assets =

14100 - 9500 = 4600

Current liabilities = Creditors + Accruals =

2000 + 300 = 2300

Quick assets = Current assets - Stock =

4600 - 2000 = 2600

Acid ratio

= \frac{2600}{2300} = 1.13:1

Answer:

A. 1.13 : 1

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