Question : Which of the following is correct for the objectives of Ratio Analysis: A:To simplify the accounting information B: To assess the operating efficiency of the business. C:To help in comparative analysis D:To analyze the profitability of the business.
Option 1: A, B and C
Option 2: B, C, and D
Option 3: A, C and D
Option 4: All of the above
Correct Answer: All of the above
Solution : Ratio analysis has the following goals: 1: Simplify accounting data. 2: Find the liquidity or the long- and short-term solvency. 3: The ability of the business to meet its short-term financial obligations is known as short-term solvency 4: In contrast, long-term solvency refers to an organization's capacity to meet its long-term debt obligations. 5: Analyze the business's operational effectiveness. 6: Analyze the company's profitability with the assistance of comparative analysis, specifically with intra- and inter-firm comparisons. Hence option 4 is the correct answer.
Question : Assertion A :- Price level changes and the purchasing power of money are inversely related. A change in the price level makes analysis of financial statements of different accounting years invalid.
Reason R :- Accounting records ignore changes in the value of
Question : Which of the following are the objectives and significance of the current ratio?
Question : The computerised accounting system refers to -
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