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

Match List – I with List – II.

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

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → A-III, B-IV, C-I, D-II

(A) Acid Test Ratio — this matches (III) Liquidity Ratio. It tests short-term solvency with quick assets.

(B) Interest Coverage Ratio — this matches (IV) Solvency Ratio. It shows the ability to service long-term debt.

(C) Inventory Turnover Ratio — this matches (I) Activity Ratio. The book calls activity ratios turnover ratios.

(D) Operating Ratio — this matches (II) Profitability Ratio.

NCERT (2026-27 edition):
Summary – “… There are many types of ratios, viz., liquidity, solvency, activity and profitability ratios. The liquidity ratios include current ratio and acid test ratio. Solvency ratios are calculated to determine the ability of the business to service its debt in the long run instead of in the short run. They include debt equity ratio, total assets to debt ratio, proprietary ratio and interest coverage ratio. The turnover ratios basically exhibit the activity levels characterised by the capacity of the business to make more sales or turnover and include Inventory Turnover, Trade Receivables Turnover, Trade Payables Turnover, Working Capital Turnover, Fixed Assets Turnover and Current assets Turnover. Profitability ratios are calculated to analyse the earning capacity of the business which is the outcome of utilisation of resources employed in the business. The ratios include Gross Profit ratio, Operating ratio, Net Profit Ratio, Return on investment (Capital employed), Earnings per Share, Book Value per Share, Dividend per Share and Price/Earning ratio.”