alleryStart learning →Net current assets are computed as
AFixed assets minus long-term loans
BCurrent assets plus fixed assets
CCurrent assets minus current liabilities
DTotal assets minus capital funds
Answer & Solution
Correct answer: C. Current assets minus current liabilities
Net current assets measure short-term strength: current assets reduced by current liabilities.
Keep practising Final Accounts of Sole Proprietors
Browse all Final Accounts of Sole Proprietors questions for CA Foundation, or explore more Accounting topics.
Related questions
Net income is also calledCharging depreciation on fixed assets has what effect on net profit?Rs 36,000 rent for 12 months is received on 1 January. At the 31 March year end, unearned Investment interest of Rs 12,000 a year is received for nine months only. Accrued income aMachine costing Rs 2,00,000 is bought on 1 October; depreciation 15% a year on cost, year Current assets are Rs 4,80,000 and current liabilities Rs 3,10,000. Net current assets arePurchases Rs 4,00,000, purchase returns Rs 25,000, carriage inwards Rs 5,000. Net cost of Gross sales Rs 6,40,000 and sales returns Rs 15,000. Net sales are