(i) A ratio is an arithmetical relationship of one number to another number.

(ii) Liquid ratio is also known as acid test ratio

(iii) Rule of thumb for current ratio is 2:1.

(iv) Debit equity ratio is the relationship between outsider’s fund and shareholder’s fund.


  • A

    All (i), (ii), (iii) and (iv) are correct

  • B

    Only (i), (ii) and (iii) are correct

  • C

    Only (ii), (iii) and (iv) are correct 

  • D

    Only (ii) and (iii) are correct