Why inventory is excluded from liquid assets? Post category:Accountancy Reading time:1 mins read SOLUTION Inventory is excluded from liquid assets because:(i) there is uncertainty whether it will be sold or not and at what price it will be sold; (ii) it will take time before it is converted into trade receivables and cash. Please Share This Share this content Opens in a new window X Opens in a new window Facebook Opens in a new window Pinterest Opens in a new window LinkedIn Opens in a new window Viber Opens in a new window VK Opens in a new window Reddit Opens in a new window Tumblr Opens in a new window Viadeo Opens in a new window WhatsApp Read more articles Previous PostState one transaction which results in an increase in ‘Liquid Ratio’ and no change in ‘Current Ratio’. Next PostWhy prepaid expenses are considered as Current assets? You Might Also Like Sajal and Kajal are partners sharing profits and losses in the ratio of 2: 1. On 1st April, 2021 their Capitals were: Sajal – Rs. 5,00,000 and Kajal – Rs. 4,00,000. Prepare Profit and Loss Appropriation Account and the Partners’ Capital Accounts at the end of the year after considering the following items: (a) Interest on Capital is to be allowed @ 5% p.a. (b) Interest on the loan advanced by Kajal for the whole year, the amount of loan being Rs. 3,00,000. (c) Interest on partners’ drawings @ 6% p.a. Drawings: Sajal Rs. 1,00,000 and Kajal Rs. 80,000. (d) 10% of the divisible profit is to be transferred to Reserve. Profit, before giving effect to the above, for year ended 31st March, 2022 is 7,02,600. October 11, 2022 Give two circumstances in which gaining ratio may be applied. September 26, 2022 How will the Realisation Account closed, if it discloses a loss? September 27, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.
Sajal and Kajal are partners sharing profits and losses in the ratio of 2: 1. On 1st April, 2021 their Capitals were: Sajal – Rs. 5,00,000 and Kajal – Rs. 4,00,000. Prepare Profit and Loss Appropriation Account and the Partners’ Capital Accounts at the end of the year after considering the following items: (a) Interest on Capital is to be allowed @ 5% p.a. (b) Interest on the loan advanced by Kajal for the whole year, the amount of loan being Rs. 3,00,000. (c) Interest on partners’ drawings @ 6% p.a. Drawings: Sajal Rs. 1,00,000 and Kajal Rs. 80,000. (d) 10% of the divisible profit is to be transferred to Reserve. Profit, before giving effect to the above, for year ended 31st March, 2022 is 7,02,600. October 11, 2022