Accounting Multiple Choice Question – 28 July 2022

A business increases its provision for doubtful debts.

What is the effect on the current and acid test ratios?

Select ONE answer:

1. current ratio decrease / acid test ratio decrease
2. current ratio decrease / acid test ratio no change
3. current ratio no change / acid test ratio decrease
4. current ratio no change / acid test ratio no change

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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