N N Capital 39,000 Land 20,000 Long Term Loan 15, 000 Building 30,000 Creditors 9,000 Stock 40,000 Debtors 6,000 Accrued wages 5,000 Cash 8, 000 68,000 68,000 Use the information above to answer the question : The acid test ratio in the company is___________

N	N
Capital 39,000	Land 20,000
Long Term Loan 15, 000	Building 30,000
Creditors 9,000	Stock 40,000
	Debtors 6,000
Accrued wages 5,000	Cash 8, 000
68,000	68,000

Use the information above to answer the question : The acid test ratio in the company is___________

A 1:1
B 2:3
C 1:2
D 3:2

jamb 2018 accounting

The correct answer is A. 1:1

Acid test ratio measures the liquidity position of a company after deduction stock (inventory) from current assets

Formula: current assets less inventory/current liabilities

18000 - 4000/14000 = 1 : 1

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