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CBSE Questions for Class 12 Commerce Accountancy Accounting Ratios Quiz 4 - MCQExams.com

Which of the following items is not taken into account while computing current ratio? 
  • Sundry Creditors
  • Sundry debtors
  • Contingent liabilities
  • Bank overdraft
Which ratio is known as a complementary of pay-out Ratio?
  • Retained earning ratio
  • Dividend yield ratio
  • Debt service coverage ratio
  • None of the above
Stock turnover ratio is calculated as ___________.
  • Turnoveratsellingpricesstockatcost
  • Turnoveratcoststockatcost
  • CostofGoodsoldAvg.Stock
  • Any of the above
Price earning ratio (PER) is calculated according to the following formula ________________.
  • EarningpershareMarketpriceperequityshare
  • MarketpriceperequityshareEarningpershare
  • NetprofitaftertaxandinterestNoofequityshare
  • None of the above
Which of the following is a satisfactory liquid or acit test ratio?
  • 2 : 1
  • 1 : 2
  • 1 : 1
  • None of the above
Current ratio is a ______________.
  • Balance sheet ratio
  • Profit & loss ratio
  • Combined ratio
  • Activity ratio
When the current ratio is 2 : 5 and the amount of Current Liabilities is Rs. 50,000. What is the amount of current assets?
  • Rs. 62,500
  • Rs. 12,500
  • Rs. 20,000
  • None of the above
When current ratio is 2 : 1 an equal increase in current assets and Current Liabilities would ______________.
  • Increase the current ratio
  • Decrease the current ratio
  • Not change the current ratio
  • None of the above
When quick ratio is 1.5:1 and the amount of quick assets Rs. 90,000. What is the amount of quick liabilities?
  • Rs. 60,000
  • Rs. 50,000
  • Rs. 45,000
  • Rs. 30,000
Higher the ratio, the more favorable it is, doesn't stand true for ___________.
  • Operating ratio
  • Liquidity ratio
  • Net profit ratio
  • Stock turnover ratio
Total leverage is a combination of
  • Various costs
  • Financial leverage and EPS
  • Operating leverage and EPS
  • Financial leverage and operating leverage
A high stock turnover ratio is the ratio does not mean that the company is _________________.
  • buying in small lots
  • efficient and sells quickly
  • buying in big lots and sells slowly
  • None of the above
When opening stock is Rs.50,000 closing stock Rs.60,000 and cost of goods sold Rs.2,20,000 the stock turnover ratio is _________.
  • 2 times
  • 3 times
  • 4 times
  • 5 times
When the concept of ratio is defined in respected to the items shown in the financial statements, it is termed as _______________.
  • Accounting ratio
  • Financial ratio
  • Costing ratio
  • None of the above
The most important test of long-term solvency of a business is _______________.
  • NetProfitSales
  • Totalassetstotaloutsideliabilities
  • DebtEquity
  • None of the above
Which of the following approaches attempts to handle the problem of risk and uncertainty in a project?
  • Risk adjusted discount rate
  • Certainty equivalent approach
  • Decision tree
  • All of the above
Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are Rs. 60,Determine value of stock.
  • Rs. 54,000
  • Rs. 60,000
  • Rs. 1,62,000
  • None of the above
 The most precise test of liquidity is ______________.
  • Quick ratio
  • Current ratio
  • Absolute liquid ratio
  • None of the above
Financial leverage can be measured in
  • Stock term
  • Flow term
  • Both (A) and (B)
  • None of the above
Ratio analysis is indispensable part of interpretation of result revealed by the _______________.
  • Government statement
  • Accounting statement
  • Financial statement
  • None of the above.
Ratio analysis provides users with crucial financial information and points out the area which require ______.
  • Investigation
  • Finalization
  • Classification
  • Automation
Net profit ratio is calculated by ____________.
  • Netprofit×100Totalsales
  • Netprofit×100Totalsales−salesreturn
  • Netprofit×100Capitalemployed
  • None of the above
If the cost of goods sold is Rs.1 lakh the value of opening and closing stock is Rs.20,000 and Rs.30,000 respectively the stock turnover ratio will be _____________.
  • 3.3 times
  • 4 times
  • 5 times
  • 2.3 times
The following group of ratios primarily measures risk ________________.
  • Liquidity, activity, and profitability
  • Liquidity, activity, and common stock
  • Liquidity, activity, and debt
  • Activity, debt, and profitability
Acid test ratio is equal to quick current assets divided by ____________.
  • Current liabilities
  • Quick current Liabilities
  • Non-Current Liabilities
  • Contingent liabilities
The ______ ratios are primarily measures of returns.
  • Liquidity
  • Activity
  • Debt
  • Profitability
Which of the following are the objective of ratio analysis?
a. Profitability.
b. Liquidity.
c. Insolvency.
d. Activity level in the business.
  • a, b, and d
  • a, b, and c
  • b, c, and d
  • a, b, c, d
Gross profit ratio is the ratio of ________________.
  • Gross profit to net total sales
  • Gross profit to net credit sales
  • Gross profit to net cash sales
  • Gross profit to net capital sales
Given - Fixed long term liabilities Rs.5,50,000 fixed assets Rs.12,00,000 capital Rs.8,50,000 Current Liabilities Rs.2,50,000 current assets Rs.4,00,000. Debt/equity ratio is _________.
  • 5:12
  • 5:16
  • 11:17
  • 3:7
The ______ measures the activity of a firm's inventory.
  • Average payment period
  • Inventory turnover
  • Average collection period
  • Current ratio
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