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 ___________.
  • $$\frac{Turnover at selling prices}{stock at cost}$$
  • $$\frac{Turnover at cost}{stock at cost}$$
  • $$\frac{Cost of Good sold}{Avg. Stock}$$
  • Any of the above
Price earning ratio (PER) is calculated according to the following formula ________________.
  • $$\frac{Earning per share}{Market price per equity share}$$
  • $$\frac{Market price per equity share}{Earning per share}$$
  • $$\frac{Net profit after tax and interest}{No of equity share}$$
  • 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 _______________.
  • $$\frac{Net Profit}{Sales}$$
  • $$\frac{Total assets}{total outside liabilities}$$
  • $$\frac{Debt}{Equity}$$
  • 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 ____________.
  • $$\frac{Net profit\times100}{Total sales}$$
  • $$\frac{Net profit\times100}{Total sales - sales return}$$
  • $$\frac{Net profit\times100}{Capital employed}$$
  • 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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