CBSE Questions for Class 12 Commerce Accountancy Accounting Ratios Quiz 1 - MCQExams.com

Activity (or Turnover) Ratios comprises of all except ____________.
  • Fixed Assets Turnover Ratio
  • Debtors Turnover Ratio
  • Dividend Payout Ratio
  • Investment Turnover Ratio
The excess of current assets over current liabilities is called as ___________.
  • Net tangible worth
  • Net worth
  • Gross working capital
  • Net working capital
Inventory turnover ratio $$=$$ Cost of goods sold $$\div$$ Cost of ______________ held during the period.
  • Average inventory
  • Minimum inventory
  • Maximum inventory
  • None of these
Return on investment may be improved by ________.
  • Increasing turnover
  • Reducing expenses
  • Increasing capital utilization
  • All of the above
Inventory turnover in days $$=$$ Days during the period $$\div$$ __________.
  • Inventory turnover ratio
  • Material consumed during the period
  • Cost of average stock during the period
  • None of these
________________ costs of borrowing increase the debt-burden.
  • High
  • Low
  • Medium
  • None of these
Money in hand along with raw materials is known as ______.
  • Human capital
  • Working capital
  • Cash in hand
  • Investment
In current ratio, current assets are compared with _________.
  • Current profit
  • Current liabilities
  • Fixed assets
  • Equity share capital
Inventory turnover measures the relationship of inventory with _______.
  • Average sales
  • Cost of goods sold
  • Total purchases
  • Total assets
Which of the following statements is correct?
  • A higher receivable turnover is not desirable
  • Interest coverage ratio depends upon tax rate
  • Increase in net profit ratio means increase in sales
  • Lower Debt-Equity ratio means lower financial risk
Which of the following helps analyzing return to equity shareholders?
  • Return on Assets
  • Earnings per Share
  • Net Profit Ratio
  • Return on Investment
Debt to total assets of a firm is 0.The debt to equity ratio would be _______.
  • 0.80
  • 0.25
  • 1.00
  • 0.75
Which of the following is a measure of debt service capacity of a firm?
  • Current Ratio
  • Acid Test Ratio
  • Interest Coverage Ratio
  • Debtors Turnover
A firm has Capital of 10,60,000; Sales of 5,00,000; Gross Profit of 2,00,000 and Expenses of 1,00,What is the Net Profit Ratio?
  • 20%
  • 50%
  • 10%
  • 40%
What is the meaning of current ratio of less than one?
  • Current liabilities < Current assets
  • Fixed assets > Current assets
  • Current assets < Current liabilities
  • Share capital > Current assets
The Gross Profit Ratio for a firm remains the same but the net profit ratio is decreasing. The reason for such behavior could be _________.
  • Increase in Costs of Goods Sold
  • Increase in Expense
  • Increase in Dividend
  • Decrease in Sales
Ratio of net income to number of equity shares known as ________.
  • Price Earnings Ratio
  • Net Profit Ratio
  • Earnings Per Share
  • Dividend Per Share
Suppliers and Creditors of a firm are interested in ______.
  • Profitability Position
  • Liquidity Position
  • Market Share Position
  • Debt Position
Debt to total assets ratio can be improved by ___________.
  • Borrowing more
  • Issue of Debentures
  • Issue of Equity Shares
  • Redemption of Debt
Shares of face value of 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is equal to ___________.
  • 5
  • 4
  • 80
  • 50
Formula for calculating Financial Leverage is _____________.
  • EBIT $$\div$$ Contribution
  • EBIT $$\div$$ EBT
  • EBIT $$\div$$ Sales
  • EBIT $$\div$$ Variable Cost
Dividends are paid out of ____________.
  • Accumulated Profit
  • Gross Profit
  • Profit after Tax
  • General Reserve
Credit Policy of a firm should involve a trade-off between increased:
  • Sales and Increased Profit
  • Profit and Increased Costs of Receivables
  • Sales and Cost of goods sold
  • None of the above
Which of the following is studied with the help of financial leverage?
  • Marketing Risk
  • Interest Rate Risk
  • Foreign Exchange Risk
  • Financing Risk
Combined Leverage is obtained from OL and FL by their _____________.
  • Addition
  • Subtraction
  • Multiplication
  • Any of these
Dividend payout ratio is equal to ____________.
  • PAT $$\div$$ Capital
  • DPS $$\div$$ EPS
  • Pref. Dividend $$\div$$ PAT
  • Pref. Dividend $$\div$$ Equity Dividend
If the closing balance of receivables is less than the opening balance for a month then which one is true out of __________________.
  • Collections > Current Purchases
  • Collections > Current Sales
  • Collections < Current Purchases
  • Collections < Current Sales
If 'r' = '$$k_e$$', than MP by Walter's Model and Gordon's Model for different payout ratios would be ______________.
  • Unequal
  • Zero
  • Equal
  • Negative
If $$k_e$$ = r, 
Under Walter's Model, which of the following is irrelevant?
  • Earnings per share
  • Dividend per share
  • DP Ratio
  • None of the above
Which ratio is very important from the lender's point of view?
  • Fixed charges coverage
  • Operating ratio
  • Net Profit Ratio
  • Gross profit ratio
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