GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Assertion (A). Performance ratios show where we are going. Reason (R). Balance sheet ratios show where we stand.
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A is true but R is false
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A is false but R is true.
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Both A and R are true and R is the correct explanation of A.
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Both A and R are true but R is not a correct explanation of A.
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Explanation:
Detailed explanation-1: -Assertion (A)-The income statement and the balance sheet are financial statements that show the cash flows in and out of the business unit. Reason (R)-The general purpose of financial statements is to show the financial position and performance of a business unit.
Detailed explanation-2: -A composite ratio or combined ratio compares two variables from two different accounts. One is taken from the Profit and Loss A/c and the other from the Balance Sheet.
There is 1 question to complete.