Interested to Buy Any Domain ? << Click Here >> for more details...
why current ratio is 2:1.why it is not 100:1,10:1,20:1 in
current ratio. please tell me....
- 8 Answers
- 16838 Views
- Thomson Reuters, I also Faced
- E-Mail Answers
Answer Posted / vijayender
Current ratios shows the relationship between current
assets and current liabilities. Ideally, this ratio should
be 2:1 because it shows that the level of current asstes is
twice the level of current liabilities and comapny is
solvent and it has enough cash or resources to care of
short term obligations.
Secondly, why it is not 10:1 or 100:1 is simply that if the
ratio is high than it would imply that the funds of the
company are unnecessarily blocked in the current assets
which can be used elsewhere to earn income. So, current
assets level should neither be too high nor too low.
| Is This Answer Correct ? | 20 Yes | 0 No |
Post New Answer View All Answers
I have deducted Notice pay Rs. 5000/- in which account to be booked the same enty, what is the head for notice pay in profit and loss a/c.
What are its characteristic features of financial accounting?
HOW WE MADE ENTRY OF SURCHARGE ON VAT PURCHASE IN PUNJAB
What is journalizing? What are the columns of a journal?
what do you maen by Expected rate of return ? Is there any formula for expected rate of return? what is systematic & unsystematic risk ? how to calculate both the risk?
Describe the proof of cash type of bank reconciliation?
what are the voucher entries for depreciation in tally and when?
Tell me in accounting, vat abbreviates what?
what is the amount withdrawlfrom other cbs branch by multicity chequ book.
Alex’s Trial Balance at 31 December 2015 Dr (BWP) Cr (BWP) Capital 18 240 Bank overdraft 3 000 Fixtures and fittings 14 100 Provision for depreciation-fixtures and fittings 8 800 Inventory 14 200 Trade receivables 12 300 Trade payables 9 900 Revenue 110 000 Purchases 51 000 Discount received 1 800 Wages and salaries 26 000 Sundry expenses 34 000 Discount allowed 620 217 540 ======= 86 420 ======== Required: i Prepare the corrected trial balance at 31 December 2015. (7 marks) ii Show any difference you find as a balance on an appropriate account.
on the basis accounting,acounting is divided in to how many classes and what are they?
In the balance sheet, where do you show tds?
how to prepare for accontant examinations
Define the term material facts in accounting?
What is the definition(meaning) for the Final accounts adjustment 'Uninsured goods lost fire'?
