0452.6.1.05 — Liquid (acid test) ratio: past paper questions
Real questions on 0452.6.1.05 — liquid (acid test) ratio
The newest 8 of 8 written questions. Open one to see it on the real paper.
- 0452/22 · February/March 2026 · Q5c[2]
Calculate the liquid (acid test) ratio. State your answer to two decimal places. The directors of D Limited are concerned about the level of the company’s overdraft. They are proposing to offer trade receivables 10% cash discount if they pay the amount due at 31 December 2025 within 14 days. No cash discount is current...
See it on the paper → - 0452/22 · February/March 2023 · Q4b(ii)[2]
the liquid (acid test) ratio. Adya is concerned about the increase in inventory over the year to 31 October 2022. She is considering reducing her selling price to increase the quantity of goods she can sell. REQUIRED
See it on the paper → - 0452/23 · May/June 2022 · Q5c[3]
Calculate the liquid ratio for M Limited at 30 November 2021. The answer should be correct to two decimal places. Liquid (acid test) ratio workings answer The managing director, Emily, plans to buy new equipment to be used to improve the profitability of the company. She is considering whether to fund the equipment by...
See it on the paper → - 0452/23 · May/June 2022 · Q5d[5]
Advise Emily whether to fund the purchase of the equipment by issuing further ordinary shares or by requesting a bank overdraft. Justify your answer.
See it on the paper → - 0452/23 · October/November 2020 · Q5b(ii)[2]
Liquid (acid test) ratio
See it on the paper → - 0452/22 · February/March 2019 · Q5d(ii)[2]
Calculate the quick (acid test) ratio at 31 January 2019. The calculation should be correct to two decimal places.
See it on the paper → - 0452/22 · February/March 2019 · Q5e[1]
Suggest one reason for the change in the quick (acid test) ratio. The directors of LW Limited are concerned at the change in the quick (acid test) ratio. One of the directors has made four proposals which he believes would increase the quick (acid test) ratio. REQUIRED
See it on the paper → - 0452/22 · February/March 2019 · Q5f[4]
Complete the table by placing a tick (✓) in the correct column to indicate the effect of each proposal on the quick (acid test) ratio. increase decrease no effect Proposal 1 Buy a new non-current asset on credit terms Proposal 2 Sell on cash terms only rather than on credit Proposal 3 Arrange for the short-term loan to...
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What examiners said
Comprehensive responses • The liquid (acid test) ratio was correctly calculated using the total of the current assets (less inventory) and the current liabilities from the statement of financial position prepared in part (b). • The instruction to state the answer to two decimal places was followed. • The ratio was correctly presented in ratio format. Limited responses • Many candidates incorrectl...
— Examiner report, February/March 2026, 0452/22 Q5(c) (Cambridge)
Ratios for the previous financial year were provided and candidates were asked to comment on the change in the gross margin and the liquid (acid test) ratio. Many candidates stated that the ratio had decreased or increased but did not explain the important factor of whether the ratio had improved or worsened. A significant number of candidates mistakenly believed that the ratios provided in the q...
— Examiner report, February/March 2023, 0452/22 Q4(b) (Cambridge)
Ratios for two similar businesses were provided and candidates were required to suggest two reasons for the difference in each ratio. A significant number of candidates provide factually correct statements which did not answer the question being asked so could not be awarded any marks. Instead of attempting to provide reasons for the difference in each ratio many candidates restricted their answer...
— Examiner report, October/November 2020, 0452/23 Q5(b) (Cambridge)
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