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WAEC Accounting 2013 Paper

Question : 10

Total: 48

\text{\& NGN}

\text{---} \;\text{Net profit}\; \& 60,000

\;\text{Total assets}\; \& 520,000

\;\text{Current liabilities}\; \& 150,000

\;\text{Current assets}\; \& 280,000

The current ratio is?

Solution:

Concept:

Current ratio measures a firm's ability to pay short-term obligations using its current assets.

Explanation:

Apply the formula:

Current ratio

= \text{Current Assets} : \text{Current Liabilities}

Insert the given values:

= 280{,}000 : 150{,}000

Divide both figures by

150{,}000

= \frac{280{,}000}{150{,}000} : \frac{150{,}000}{150{,}000}

= 1.866\ldots : 1

Rounded to two decimal places:

= 1.87 : 1

Answer:

1.87 : 1

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