Accounting Multiple Choice Question – 5 December 2023

Assets and liabilities of Alex Trading Ltd at its year end include the following information.

• accruals – £5,000
• bank overdraft – £6,800
• cash – £600
• prepayments – £4,500
• proposed dividend – £12,000
• Inventory – £51,800
• trade payables – £20,100
• trade receivables – £24,200

What is the current ratio?

Select ONE answer:

1. 0.67 : 1
2. 1.85 : 1
3. 2.19 : 1
4. 2.54 : 1

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 2

1. Not correct
2. Correct – (£51,800 + £24,200 + £4,500 + £600) / (£5,000 + £6,800 + £12,000 + £20,100) == > £81,100 / £43,900 == > 1.85 : 1
3. Not correct
4. Not correct

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