Match List – I with List – II. LIST I LIST II A. Liquidity Ratio I. I… | Accountancy Part B CUET question

Match List – I with List – II.

LIST I	LIST II
A. Liquidity Ratio	I. Interest Coverage Ratio
B. Solvency Ratio	II. Trade Payable Turnover Ratio
C. Activity Ratio	III. Acid Test Ratio
D. Profitability Ratio	IV. Operating Ratio

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → A-III, B-I, C-II, D-IV

(A) Liquidity Ratio — this matches (III) Acid Test Ratio. It compares quick assets with current liabilities.

(B) Solvency Ratio — this matches (I) Interest Coverage Ratio. It shows how far profit covers the interest on long-term debt.

(C) Activity Ratio — this matches (II) Trade Payable Turnover Ratio. It is one of the turnover ratios.

(D) Profitability Ratio — this matches (IV) Operating Ratio. It relates operating cost to revenue from operations.

NCERT (2026-27 edition):
Quick or Liquid Ratio – “… Because of exclusion of non-liquid current assets it is considered better than current ratio as a measure of liquidity position of the business. It is calculated to serve as a supplementary check on liquidity position of the business and is therefore, also known as ‘Acid-Test Ratio’.”

NCERT (2026-27 edition):
Solvency Ratios – “… Solvency ratios are calculated to determine the ability of the business to service its debt in the long run. The following ratios are normally computed for evaluating solvency of the business. 1. Debt-Equity Ratio; 2. Debt to Capital Employed Ratio; 3. Proprietary Ratio; 4. Total Assets to Debt Ratio; 5. Interest Coverage Ratio.”

NCERT (2026-27 edition):
Activity (or Turnover) Ratio – “… The important activity ratios calculated under this category are 1. Inventory Turnover; 2. Trade receivable Turnover; 3. Trade payable Turnover; 4. Investment (Net assets) Turnover 5. Fixed assets Turnover; and 6. Working capital Turnover.”

NCERT (2026-27 edition):
Profitability Ratios – “… Profitability ratios are calculated to analyse the earning capacity of the business which is the outcome of utilisation of resources employed in the business. There is a close relationship between the profit and the efficiency with which the resources employed in the business are utilised. The various ratios which are commonly used to analyse the profitability of the business are: 1. Gross profit ratio 2. Operating ratio 3. Operating profit ratio 4. Net profit ratio 5. Return on Investment (ROI) or Return on Capital Employed (ROCE) 6. Return on Net Worth (RONW) 7. Earnings per share 8. Book value per share 9. Dividend payout ratio 10. Price earning ratio.”