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Accounting Ratios — Accountancy STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceAccountancyAccounting Ratios1 Mark
Question
When one variable is from income statement and another variable from balance sheet it is known as___________ratio.
  1. Balance sheet
  2. Income statement
  3. Composite
  4. All of the above
✓

Answer

  1. Composite
Explanation:

When one variable is from income statement and another variable from balance sheet it is known as composite ratio. For example Trade receivable turnover ratio is calculated using the Net credit sales figure from the income statement and the Average balance of trade receivables figure from the balance sheet.

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