Assertion (A): A high operating ratio indicates a favourable position.
Reason (R): A high operating ratio leaves a high margin to meet non-operating expenses.
A. Both (A) and (R) are correct, and (R) correctly explains (A)
B. Both (A) and (R) are correct, but (R) does not explain (A)
C. Both (A)and (R) are incorrect
D. (A) is correct, but (R) is incorrect
Answer: Option C
Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
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