MANAGENT ACCOUNTING Question And Answers
- What is meant by cost of goods sold?
Answer:- Cost of goods sold (COGS) refers to the direct costs attributable to the production of the goods sold in a company. It is calculated as opening stock + purchases – closing stock.
- Give the formula for current ratio.
Answer:- TheCurrent Ratio formula is = Current Assets / Current Liabilities.
- Give the formula for liquid ratio.
Answer:- The liquid Ratio formula is = Liquid Assets / Current Liabilities.
- Give the formula for absolute liquid ratio.
Answer:- The absolute liquid Ratio formula is = Absolute liquid Assets / Current Liabilities.
- List down the current assets.
Answer:-
- Cash in hand
- Cash at bank
- Bills receivable
- Sundry debtors
- Inventory
- Short-term investments
- Prepaid expenses
- Marketable securities
- List down the current liabilities.
Answer:-
- Bank overdraft
- Sundry creditors
- Bills payable
- Income tax payable
- Dividend payable
- Outstanding expenses
- What is meant by liquidity?
Answer:- Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.
- What is the difference between current ratio and liquid ratio?
Answer:- The current ratio uses the total amount of all of the current assets. The acid test ratio excludes inventory and some other amounts such as prepaid expenses and deferred income taxes. What is the difference between current ratio and absolute liquid ratio?
- Current ratio is 2.8, liquid ratio is 1.5 working capital is Rs.1,62,000 find current assets.
Answer:- Current assets = Rs.2,52,000
- Current ratio is 2.5 working capital is Rs.90,000 find current liability.
Answer:- Current liability = Rs. 60,000
