Post Utme Ksu 2020 Accounting Question 3

Practice objective / multiple choice question 3 from the 2020 Post Utme Ksu Accounting examination.

Post Utme Ksu 2020 Accounting Objective / Multiple Choice
Question 3 POST_UTME_KSU • 2020 • ACCOUNTING • objective

A company's balance sheet shows a current ratio of 2:1. If the total current assets are ₦120,000 and the total current liabilities are ₦60,000, what is the correct interpretation of the current ratio?

Answer Options

Correct Answer A. The company has sufficient liquidity to meet its short-term obligations
B. The company has insufficient liquidity to meet its short-term obligations
C. The company has a high level of liquidity and can take on more debt
D. The company has a low level of liquidity and should reduce its debt
Correct Answer
A
Correct Option:
The company has sufficient liquidity to meet its short-term obligations

About This Question

This is Post Utme Ksu 2020 Accounting Question 3. It is one of the objective questions from the 2020 Post Utme Ksu Accounting examination.

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