Assertion (A): Higher the gross profit ratio, the better it is. Reason (R): A low gross profit ratio indicates unfavourable trend in the form of reduction in selling prices. Select the correct answer from the options giv

CS Executive · Cost and Management Accounting · PYQS · December 2015
Assertion (A): Higher the gross profit ratio, the better it is. Reason (R): A low gross profit ratio indicates unfavourable trend in the form of reduction in selling prices. Select the correct answer from the options given below —
(A) Both A and R are true and R is the correct explanation of A
(B) Both A and R are true, but R is not the correct explanation of A
(C) A is true, but R is false
(D) A is false, but R is true.

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Financial Statement Analysis

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