A-LevelAccountingAnalysis and communication of accounting information9706/12 · Oct/Nov 2018 · 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

C: Y has better credit control system.

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Topic: Analysis and communication of accounting information, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2018 Paper 1 Variant 2, question 18.

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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?

✓ Correct answer

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