Post Utme Rhema University 2018 Accounting Question 39

Practice objective / multiple choice question 39 from the 2018 Post Utme Rhema University Accounting examination.

Post Utme Rhema University 2018 Accounting Objective / Multiple Choice
Question 39 POST_UTME_RHEMA_UNIVERSITY • 2018 • ACCOUNTING • objective

A company's balance sheet shows a current ratio of 2:1. If the company's current assets are ₦200,000 and its current liabilities are ₦100,000, what is the correct interpretation of this 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
D. The company has a low level of liquidity
Correct Answer
A
Correct Option:
The company has sufficient liquidity to meet its short-term obligations

About This Question

This is Post Utme Rhema University 2018 Accounting Question 39. It is one of the objective questions from the 2018 Post Utme Rhema University Accounting examination.

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