The term 'Liquidity Ratio' includes: MCQ with Answer and Explanation

Question

Share Report Error

The term 'Liquidity Ratio' includes:

A. Gross Profit Ratio and Net Profit Ratio

B. Stock Turnover Ratio and Debtors Turnover Ratio

C. Debt-Equity Ratio and Proprietary Ratio

D. Current Ratio and Quick Ratio

Answer: Option D

Solution (By JKSSB Mock Tests)

Liquidity ratios measure the short-term solvency of a firm and include the Current Ratio and the Quick (or Acid-Test) Ratio.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1

In a partnership, interest on capital is allowed only when:

A. It is provided in the partnership deed

B. It is mandatory under law

C. The firm makes profit

D. The firm has cash

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Interest on capital is payable only if the partnership deed so provides, and only out of profits.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The threshold limit for paying Advance Tax is when the estimated tax liability for the year is:

A. Rs 20,000 or more

B. Rs 50,000 or more

C. Rs 10,000 or more

D. Rs 5,000 or more

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
If the estimated tax liability (after TDS) exceeds Rs 10,000, the taxpayer is obligated to pay advance tax in installments.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

The 'Materiality' of an item is determined by:

A. Size and nature of the item

B. Decision of auditor

C. Government rule

D. Only the amount

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Materiality depends on relative size and nature; an item is material if its omission/misstatement could influence decisions.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Explore All Accountancy and Book Keeping MCQs