Question

The statistical yard stick that provides a measure of the relationship between two accounting figures is a .

• A. Current ratio
• B. Accounting ratio
• C. Capital output ratio
• D. Debt to equity ratio

Answer 1

Answer: (B)

Accounting ratio

1. Current ratio is the ratio to measure relationship between current assets and current liability.
2. Capital output ratio is the ratio which measures that, how much capital is required to produce one unit of output.
3. Debt to equity ratio measures the proportion of debt funds to the owners capital.
4. Ratios are mathematical relationship between two figures. Accounting ratios are ratios that compare relationship between between two accounting figures.