Match the items of List - I with those of the List - II and indicate the correct code for the following…
Matching the accounting ratios with their functional categories: (a) Debtors Turnover Ratio is an (iii) Activity (or Efficiency/Turnover) Ratio; (b) Proprietary Ratio…
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Match the items of List - I with those of the List - II and indicate the correct code for the following :
| List-I | List-II |
|---|---|
| (a) Debtors Turnover Ratio | (i) Solvency Ratio |
| (b) Proprietary Ratio | (ii) Liquidity Ratio |
| (c) Operating Ratio | (iii) Activity Ratio |
| (d) Acid Test Ratio | (iv) Profitability Ratio |
Answer and explanation
Correct answer C
Matching the accounting ratios with their functional categories: (a) Debtors Turnover Ratio is an (iii) Activity (or Efficiency/Turnover) Ratio; (b) Proprietary Ratio (Shareholders' Funds / Total Assets) is a long-term (i) Solvency Ratio; (c) Operating Ratio is a (iv) Profitability Ratio; and (d) Acid Test (Quick) Ratio is a short-term (ii) Liquidity Ratio.
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UGC NET Commerce