Question

Match List-I with List-II.

List-I	List-II
(A) Test of Activity	(I) Acid Test Ratio
(B) Test of Liquidity	(II) Debt Equity Ratio
(C) Test of Solvency	(III) Debtor Turnover Ratio
(D) Test of Profitability	(IV) Return on Investment Ratio

• A. (A)-(III), (B) - (I), (C)- (II), (D) - (IV)
• B. (A)-(I), (B)-(II), (C)-(III), (D) - (IV)
• C. (A)-(IV), (B) - (III), (C)- (II), (D) - (I)
• D. (A)-(I), (B) - (IV), (C) - (III), (D) - (II)

Answer 1

The Correct Option is A

Test of Activity is matched with Debtor Turnover Ratio (A)-(III), as it measures how efficiently a company is using its assets. - Test of Liquidity is matched with Acid Test Ratio (B)-(I), which measures a company’s ability to meet short-term obligations. - Test of Solvency is matched with Debt Equity Ratio (C)-(II), which assesses long-term financial stability. - Test of Profitability is matched with Return on Investment Ratio (D)-(IV), which evaluates how profitably a company is utilizing its investments.