Post Utme Skyline University 2021 Accounting Question 22

Practice objective / multiple choice question 22 from the 2021 Post Utme Skyline University Accounting examination.

Post Utme Skyline University 2021 Accounting Objective / Multiple Choice
Question 22 POST_UTME_SKYLINE_UNIVERSITY • 2021 • 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 moderate level of liquidity to meet its short-term obligations
D. The company has an excessive 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 Skyline University 2021 Accounting Question 22. It is one of the objective questions from the 2021 Post Utme Skyline University Accounting examination.

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