ratios enables comparison of two different scenarios on the basis of accounting information.

Financial

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Costing

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Information

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Accounting

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Solution

The correct option is D Accounting
Accounting ratios enables comparison of two different scenarios on the basis of accounting information. These ratios are based on financial statements and show the relation between various accounting variables

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Particulars	₹	Particulars	₹
Capital Employed	50,00,000	Share Capital	35,00,000
Current Liabilities	20,00,000	10% Debentures	10,00,000
Land and Building	60,00,000	General Reserve	3,00,000
Trade Receivable	4,00,000	Surplus, i.e., Balance in Statement of Profit and Loss	2,00,000
Cash and Cash Equivalents	5,00,000
Investment (Trade)	1,00,000

Information:		₹		₹
Revenue from Operations:	(a) Cash Sales	40,00,000	Paid-up Share Capital	17,00,000
	(b) Credit Sales	20,00,000	6% Debentures	3,00,000
Cost of Goods Sold		35,00,000	9% Loan from Bank	7,00,000
Other Current Assets		8,00,000	Debentures Redemption Reserve	3,00,000
Current Liabilities		4,00,000	Closing Inventory	1,00,000

	₹		₹
Current Assets	70,000	Revenue from Operations (Sales)	1,20,000
Current Liabilities	35,000	Operating Expenses	40,000
Inventory	30,000	Cost of Goods Sold or Cost of Revenue from Operations	60,000

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