What Should You Keep in Mind When Comparing Ratios to Fractions

question 9

Multiple Choice

What should you keep in mind when comparing ratios to fractions?

• A)Conceptually,they are exactly the same thing.
• B)They have the same meaning when a ratio is of the part-to-whole type.
• C)They both have a fraction bar that causes students to mistakenly think they are related in some way.
• D)Operations can be done with fractions while they can't be done with ratios.

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Definitions:

Carrying Amount

The book value of an asset or liability on a company’s balance sheet, considering factors like depreciation or amortization.

Quick Ratio

A liquidity metric that measures a company's ability to cover its short-term obligations with its most liquid assets excluding inventory.

Contingent Liability

A potential financial obligation that depends on a future event occurring or not occurring.

Reasonably Possible

A term used to describe the likelihood of an event occurring that is more than remote but less than probable, often used in financial reporting.