CBSE Questions for Class 12 Commerce Accountancy Accounting Ratios Quiz 11 - MCQExams.com

The stock turnover ratio is a/an _______ ratio.
  • Insolvency
  • Activity Ratio
  • Liquidity
  • Total Investment
Payment ratio means the ratio of ___________ .
  • debtors to creditors
  • profit distributed to profit retained
  • earning that are distributed through dividends
  • interest payment to dividends
A Piece Rate System written by ___________.
  • Harold Koontz
  • Taylor
  • Louis Allan
  • Hendry Fayol
Calculate following Operating Profit ratio from the following information: 
Current Assets                                                  Rs.35,000
Stock                                                                  Rs.15,000
Operating Expenses                                         Rs.20,000
Sales                                                                   Rs.60,000
Cost of Goods Sold                                           Rs.30,000
  • $$83.33%$$
  • $$67.40%$$
  • $$16.67%$$
  • $$50.00%$$
Ability to trade at net price very quickly is classified as _____________.
  • original trading
  • liquidity
  • offline trading
  • fixed price trading
Given that,
Current Ratio = 2.5
Acid-test ratio = 1.5
Net working capital = Rs. 60,000
The value of current liabilities will be ___________ .
  • Rs. 15,000
  • Rs. 40,000
  • Rs. 60,000
  • Rs. 1,00,000
Given the following information:

Sales                                       3,40,000

Cost of Goods Sold                1,20,000 

Selling expenses                       80,000

Administrative Expenses           40,000 

Calculate Operating Ratio from the above:
  • $$70.58%$$
  • $$67.40%$$
  • $$64.70%$$
  • $$75.58%$$
Collection of sundry debtors would _______________.
  • Increase current ratio
  • Decrease current ratio
  • Have no effect on current ratio
  • Increase debtors turnover
Which one of the following statements is correct? When creditors' velocity or creditors' turnover is higher as compared to debtors' velocity, it would ______________.
  • improve liquidity
  • reduce liquidity
  • have no effect on liquidity
  • improve financial position
The current ratio of a company is 2:Which of the following suggestions would improve the ratio?
  • To pay a current liability
  • To borrow money on an interest-bearing promissory note
  • To purchase stocks for cash
  • To give an interest-bearing promissory note to a creditor to whom money was owed on current account
A higher accounts receivable turnover ratio means _______________.
  • Lower debt collection period
  • Higher debt collection period
  • Lower sales
  • Higher sales
Which of the following is not correct about the concept 'current ratio' - use code to select your answer:
It is ratio of a firm's current assets to current liabilities
It is an indicator of a firm's ability to meet short-term financial obligations.
  • Only $$1$$
  • Only $$2$$
  • $$1$$ and $$2$$
  • Neither $$1$$ and $$2$$
What does net profit ratio signify?
  • Operational profitability
  • Liquidity position
  • Solvency
  • Profit
Trading on Equity                  .
  • is always beneficial
  • can be beneficial
  • is never beneficial
  • None of the Above
Inventory turnover ratio $$=$$ Cost of __________ during the period $$\div$$ Cost of average inventory held during the period.
  • Inventory consumed
  • Minimum inventory
  • Maximum inventory
  • None of these
There is deterioration in the management of working capital of XYZ Ltd. What does it refer to?
  • That the capital employed has reduced
  • That the profitability has gone up
  • That debtors collection period has increased
  • That sales has decreased
In order to calculate EPS, Profit after Tax and Preference Dividend is divided by ________________.
  • m< of Equity Shares
  • Number of Equity Shares
  • Face Value of Equity Shares
  • None of the above
Operating Leverage is calculated as ______________.
  • Contribution $$\div$$ EBIT
  • EBIT $$\div$$ PBT
  • EBIT $$\div$$ Interest
  • EBIT $$\div$$ Tax
Operating leverage helps in the analysis of __________.
  • Business Risk
  • Financing Risk
  • Production Risk
  • Credit Risk
Working capital turnover measures the relationship of working capital with ________.
  • Fixed assets
  • Sales
  • Purchases
  • Stock
Dividend Payout Ratio is equal to ________.
  • PAT Capital
  • DPS $$\div$$ EPS
  • Preferred dividend $$\div$$ PAT
  • Preferred dividend $$\div$$ Equity Dividend
Benefit of 'Trading on Equity' is available only if                      .
  • Rate of interest < Rate of return
  • Rate of interest > Rate of return
  • Both A and B
  • None of A and B
'Constant Dividend Per Share' Policy is considered as                          .
  • Increasing Dividend Policy
  • Decreasing Dividend Policy
  • Stable Dividend Policy
  • None of the Above
In response to market expectations, the credit period has been increased from 45 days to 60 days. This would result in a _____________.
  • Decrease in sales
  • Decrease in debtors
  • Increase in bad debts
  • Increase in average collection period
Relationship between change in sales and the operating profit is known as ____________.
  • Financial leverage
  • Operating leverage
  • Net profit ratio
  • Gross profit ratio
Indifference level of EBIT is one at which ______________.
  • EPS is zero
  • EPS is minimum
  • EPS is highest
  • None of the above
At indifference level of EBIT, different capital have                    .
  • Same EBIT
  • Same EPS
  • Same PAT
  • Same PBT
Which of the following appearing in the balance sheet, generates tax advantage and hence affects the capital structure decision?
  • Reserves and Surplus.
  • Long-term Debt.
  • Preference Share Capital.
  • Equity Share Capital.
Every company should follow                   .
  • High Dividend Payment
  • Low Dividend Payment
  • Stable Dividend Payment
  • Fixed Dividend Payment
Financial Break-even level of EBIT is one at which EPS is equal to _________.
  • One
  • Zero
  • Infinite
  • Negative
0:0:1


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