GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Consider the following ratios:
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Acid test ratio
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Inventory turnover ratio
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Both (a) and (b)
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Bad debts to sales ratio
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Explanation:
Detailed explanation-1: -Ratios compare two numbers, usually by dividing them. If you are comparing one data point (A) to another data point (B), your formula would be A/B. This means you are dividing information A by information B. For example, if A is five and B is 10, your ratio will be 5/10. Solve the equation.
Detailed explanation-2: -The ratio of the two quantities of the same kind and in the same units is a fraction that shows how many times one quantity is of the other. Ratio is denoted by using the symbol ‘:’. The ratio of two quantities a and b (b ≠ 0) is a/b and is denoted by a : b.
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