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Which of the following is a false statement about the current ratio?

a. A declining current ratio might be a sign of a deteriorating financial condition.d. A declining current ratio might be the result of eliminating obsolete inventories.c. An improving current ratio might be the result of stockpiling inventories.d. The general rule of thumb calls for a current ratio of3:1

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Question added by Hany Sabry , Finance Manager , GMC for Engineering & Feeding Industries (S.A.E)
Date Posted: 2015/01/20
georgei assi
by georgei assi , مدير حسابات , المجموعة السورية

d. The general rule of thumb calls for a current ratio of3:1

mohamed Hakim CMA CPA Candidate
by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

Option D

NORMAL FROM .5 TO2.

 

Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

d

MUHAMMED HARIS MI
by MUHAMMED HARIS MI , Senior Audit Staff , Saud Bahwan Group LLC.

OPTION. D

Ishtiaq Ahmed
by Ishtiaq Ahmed , Lead Analyst and Consultant , IAEResearch

D is the correct answer as the general rule of thumb is2:1

Raheel Iqbal
by Raheel Iqbal , Accountant , Al Tala'a International Transportation Co. Ltd. (HANCO Holding)

D option is most favorable.

D)  Depends on the industry under scrutiny as retailers / supermarkets have no debtors, high creditors; all business is paid by cash transactions, inventory levels are high; therefore ratio will not be3:1

imran Noor -
by imran Noor - , Audit Officer , Auditor General of Pakistan

Option (D) is the correct answer

Faisal Khan
by Faisal Khan , Audit Manager , Asad Rasul & Company Chartered Accountant

Option C

Waqas Raza Khan
by Waqas Raza Khan , Accountant , Cold Store Group of Saudi Arabia

Option----- D 

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