JAMB Accounting 2020 Objective — Question 25
Question 25 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2020 Objective paper, with the correct answer and a full explanation.
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25. Acid test is used to
- A. A. Test acidity of accounting records
- B. B. Test viability of accounting records
- C. C. Test correctness of accounting records
- D. D. Test ability of the firm to meet its daily cash obligationCorrect
Explanation
The acid test is used to test the liquidity of the firm. The liquidity test shows the ability of the firm to meet its cash obligations within a short term.
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