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Assertion (A)… (Class 12 Accountancy SQP 2026-27, Q28)

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AccountancyCBSE Class 12 · Sample paper, session 2026-27 · 1 mark · Assertion-reason

CBSE Class 12 Accountancy sample paper 2026-27: question 28

From the official CBSE sample question paper for 2026-27, section B-I, question 28, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q28 · 1 mark · Assertion-reasonAccounting Ratios

Assertion (A): Current Ratio can never be less than Liquid ratio.
Reason (R): Current Ratio includes all current assets, including inventory and prepaid expenses.

  1. (A)Both A and R are correct, and R is the correct explanation of A
  2. (B)Both A and R are correct, but R is not the correct explanation of A
  3. (C)A is correct but R is incorrect
  4. (D)A is incorrect but R is correct

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

Open one hint at a time and try again before the next.

Hint 1

Compare the numerators of the two ratios.

Hint 2

Inventory and prepaid expenses can only add to current assets.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Both ratios have current liabilities as the denominator; current assets include liquid assets plus inventory and prepaid expenses.

  2. So the current ratio is never below the liquid ratio, and the Reason gives exactly why. Option (A).

    1 mark

Answer: (A) Both A and R are correct, and R is the correct explanation of A

Where the marks are

  • Current assets ≥ liquid assets with the same denominator (1 mark)

Revise the chapter

  • Chapter: Accounting Ratios (notes, formulas, where marks are lost and every past question)
Practise this chapterBoard-style questions from Accounting Ratios, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2026-27: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.