| Directions: Each of the following questions consists of two statements, one is Assertion (A) and the other is Reason (R). Give answer: |
| Assertion (A): Liquid ratio reveals strength of liquidity of a business unit. |
| Reason (R): Liquid ratio analysis liquid assets and liquid liabilities of a business unit in order to assess the extent of Liquidity. |
A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
B) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A).
C) Assertion (A) is true but Reason (R) is false.
D) Assertion (A) is false but Reason (R) is true.
Correct Answer: A
Solution :
[a]
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