Match the Classifications of Ratios with Each Description

question 137

Multiple Choice

Match the classifications of ratios with each description.
-Measures the earning ability of a company

• A)Liquidity Ratio
• B)Leverage Ratio
• C)Profitability Ratio
• D)Horizontal Analysis
• E)Trend Analysis

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Definitions:

Budgeting

The process of creating a plan to spend your money, outlining anticipated expenses and income to guide financial operations.

Administrative Expenses

Administrative Expenses are overhead costs not directly tied to a specific function such as manufacturing, production, or sales, and can include salaries, rent, and office supplies.

Budgeting

A financial planning process whereby individuals or entities estimate their expected incomes and expenditures over a defined period.

Activity Variance

Activity variance calculates the difference between the planned quantity of activity and the actual quantity, analyzing the impact on costs and operational efficiency.