A low current ratio in business indicates that the business is
Long term loan repayment problem
Efficient in the utilization of its resources
Unable to pay its bills on time
Growing its net assets effectively
Correct answer is C
A low current ratio indicates problems in working capital management. All other things being equal, creditors consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which are due over the next 12 months.
Agreement between partners is contained in the partnership
Act
Deeds
Accord
Deal
Correct answer is B
A partnership deed, also known as a partnership agreement, is a document that outlines in detail the rights and responsibilities of all parties to a business operation. It has the force of law and is designed to guide the partners in the conduct of the business.
Materiality concept
Matching concept
Constituency concept
Realization concept
Correct answer is D
The realization principle is the concept that revenue can only be recognized once the underlying goods or services associated with the revenue have been delivered or rendered, respectively.
Which of the following accounts has credit balance?
Return inwards account
Machinery account
Sales account
Cash account
Correct answer is C
Liabilities, revenues and sales, gains, and owner equity and stockholders' equity accounts normally have credit balances.
The minimum number of persons required to form a partnership business is
2
3
5
10
Correct answer is A
A minimum of two Persons is required to start a Partnership firm. A maximum number of 20 Partners are allowed in a Partnership firm. You require at least two persons to start a partnership firm.