Post Utme Mountain Top University 2018 Accounting Question 38

Practice objective / multiple choice question 38 from the 2018 Post Utme Mountain Top University Accounting examination.

Post Utme Mountain Top University 2018 Accounting Objective / Multiple Choice
Question 38 POST_UTME_MOUNTAIN_TOP_UNIVERSITY • 2018 • ACCOUNTING • objective

A company's balance sheet shows a current ratio of 2:1. If the company's current assets are ₦100,000 and its current liabilities are ₦50,000, 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 moderate level of liquidity to meet its short-term obligations
D. The company has a high level of liquidity to meet its short-term obligations
Correct Answer
A
Correct Option:
The company has sufficient liquidity to meet its short-term obligations

About This Question

This is Post Utme Mountain Top University 2018 Accounting Question 38. It is one of the objective questions from the 2018 Post Utme Mountain Top University Accounting examination.

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