Use the following to answer the given question, \(\begin{array}{c|c} & ₦ \\ \hline Premises & 100,000 \\ Plant & 50,000\\ Fixtures & 30,000\\ Stock & 2,000 ...

Use the following to answer the given question,
\(\begin{array}{c|c} & ₦ \\ \hline Premises & 100,000 \\ Plant & 50,000\\ Fixtures & 30,000\\ Stock & 2,000 \\ Debtor & 10,000\\ Cash & 10,000\\ Creditors & 20,000 \end{array}\)
Quick ratio is

Answer Details

To calculate the quick ratio, we need to add up all the quick assets and divide it by the current liabilities. Quick assets refer to assets that can be easily converted into cash, such as cash, debtors, and stock. Current liabilities refer to liabilities that need to be paid off within a year, such as creditors. In this case, the quick assets are cash, debtor, and stock, which sum up to ₦22,000. The current liabilities are ₦20,000. Quick ratio = Quick assets / Current liabilities = ₦22,000 / ₦20,000 Simplifying, we get: Quick ratio = 1.1 : 1 Therefore, the answer is 1 : 1 (option d). This means that for every ₦1 of current liabilities, the company has ₦1 of quick assets to cover it.