A-LevelAccountingAnalysis and Interpretation of Financial Statements / RatiosOct/Nov 2018Paper 1 Q181 Mark
The financial data relates to two businesses. trade receivable turnover (days) X: 90 Y: 40 trade payable turnover (days) X: 50 Y: 70 liquid (acid test) ratio X: 3:1 Y: 1:1 current ratio X: 4.5:1 Y: 6.2:1 Which statement about the comparison of the two businesses' performance is correct?
AX has better credit control system.
BX has higher profitability.
CY has better credit control system.
DY has higher profitability.
✓ Correct Answer
The correct answer is C. This question tests the candidate's understanding of analysis and interpretation of financial statements / ratios within the Accountingsyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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