Accounting - Study Mode
[#2636] The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources
Correct Answer
(A) Liquidity ratio
Explanation
Solution: The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources is known as Liquidity ratio.
[#2637] The measure of how efficiently the assets resources are employed by the firm is called
Correct Answer
(C) Activity ratio
Explanation
Solution: The measure of how efficiently the assets resources are employed by the firm is called Activity ratio. Activity ratios are a category of financial ratios that measure a firm's ability to convert different accounts within its balance sheets into cash or sales.
[#2638] The following is (are) the current liability (ies)
Correct Answer
(D) All of the above
Explanation
Solution: Bills payable, Outstanding expenses and Bank Overdraft are the current liabilities.
[#2639] Current ratio =
Correct Answer
(B) Current assets/Current liabilities
Explanation
Solution: Current ratio = Current assets/Current liabilities. Current ratio is a comparison of current assets to current liabilities, calculated by dividing your current assets by your current liabilities.
[#2640] Assertion (A): The maximum number of partners has been specified in the Companies Act. 1956. Reason (R): The Partnership Act, 1932 has been merged with the Companies Act, 1956. Select the correct answer:
Correct Answer
(C) (A) is true but (R) is false