CBSE Questions for Class 12 Commerce Accountancy Accounting Ratios Quiz 7 - MCQExams.com

Match List I and List II and select the correct answer using the codes given below the lists :
List IList II
Financial leverageEfficiently
Quick ratioProfitability
Stock turnover ratioRisk
Margin on salesLiquidity






 
  • (a)-3, (b)-4, (c)-1, (d)-2
  • (a)-4, (b)-3, (c)-1, (d)-2
  • (a)-4, (b)-3, (c)-2, (d)-1
  • (a)-3, (b)-4, (c)-2, (d)-1
Given that
Opening stock          : Rs.$$12,000$$
Purchases                : Rs.$$90,000$$
Return outward         : Rs.$$2,000$$
And that the closing stock is Rs.$$2,000$$ less than the opening stock
the stock turnover ratio is _____________.



  • $$5$$ times
  • $$7$$ times
  • $$8$$ times
  • $$10$$ times
Match List I (ratio) and List II (methods of calculation) and select the correct answer using the codes given below the lists : 

List IList II
Debt equity ratioTotal debt + pref.capital / Equity - pref capital.
Proprietary ratioExternal equity / owner's equity
Capital gearing ratioTotal shareholder's funds / total assets
ROIProfit before interest & tax / net assets





  • (a)-2, (b)-3, (c)-1, (d)-4
  • (a)-2, (b)-3, (c)-4, (d)-1
  • (a)-3, (b)-2, (c)-1, (d)-4
  • (a)-3, (b)-2, (c)-4, (d)-1
Pay out ratio means the ratio of ____________.
  • Debtors to creditors
  • Profit distributed to profit retained
  • Earning that are distributed through dividends
  • Interest payment to dividends
Given that
Sales                   =  Rs.$$50,000$$
Variable cost       =  Rs.$$20,000$$
Fixed cost            =  Rs.$$10,000$$
Capital employed =  Rs.$$2,00,000$$
The profit volume ratio will be _________.


  • $$10\%$$
  • $$15\%$$
  • $$50\%$$
  • $$60\%$$
Whether Debt-equity ratio will.... when purchase of a fixed asset on long term deferred payment basis?
  • Decrease
  • No effect
  • Increase
  • None of the above
EBIT/Total Assets ratio is ______________.
  • Liquidity ratio
  • Profitability ratio
  • Solvency ratio
  • Turnover ratio
If a bank receives a new deposit of Rs.1000 and has a cash reserve requirement of 10 per cent. Then it has Rs.900 to invest or give out as a loan. Assume the bank lends Rs.900 to a borrower who deposits the same in a bank with the same cash reserves requirement, what is the total amount of bank money created at this stage? 
  • Rs.190
  • Rs.1000
  • Rs.1800
  • Rs.1900
  • Rs.2000
Operating ratio is given by _________________.
  • $$\frac{Total operating profit}{Total shareholder's equity}$$
  • $$\frac{Total operating cost}{Total operating revenue}$$
  • $$\frac{Total operating cost}{Total capital employed}$$
  • $$\frac{Total operating profit}{Total operating capital}$$
Du-pont system refers to
  • Stock Index in USA
  • Stock Index in Japan
  • Analyzing profit ratios in terms of profit margin and turnover ratios
  • All of the above
Which ratio is used to measure the overall profitability?
  • Net Profit ratio
  • Capital Ratio
  • Current ratio
  • All of theses
The most commonly used classification of ratio is                 .
  • Activity ratios
  • Solvency ratios
  • Liquidity ratios
  • All of the above
 When one variable is from income statement and another variable from balance sheet it is known as___________ratio.
  • Balance sheet
  • Income statement
  • Composite
  • All of the above
 When ratio is calculated using both figures from the income statement it is known as                .
  • Balance sheet ratios
  • Income statement ratios
  • Composite ratios
  • All of the above
Which of the following is an example of activity ratio?
  • Net profit ratio
  • Operating ratio
  • Current ratio
  • None of the above
If fully depreciated fixed assets costing Rs.$$45,000$$ is discarded and no salvage value is realised, the current ratio will ___________.
  • Decrease
  • Increase
  • No effect
  • None of the above
Which of the following statement(s) is / are true regarding Net Benefit Cost Ratio (NBCR)?
  • It does not take time value of money into consideration
  • This criterion cannot be used when the investment outlay is spread over more than one period
  • IF NBCR = 0.75 the project cannot be accepted
  • All of the above
  • Both (B) and (C) above
When Quick Ratio $$3$$, Current Assets Rs.$$70,000$$, Inventory Rs.$$10,000$$ then the current liabilities will be __________.
  • Rs.$$40,000$$
  • Rs.$$30,000$$
  • Rs.$$20,000$$
  • Rs.$$10,000$$
Debtors turnover ratio is ____________.
  • $$\frac{creditsales}{Average debtors}$$
  • $$\frac{Total sales}{Average debtors}$$
  • $$\frac{credit sales \times days in the year}{Debtors}$$
  • None of the above
Formula for current ratio is                   .
  • Current liabilities/current assets
  • Current assets/current liabilities
  • Fixed asset/ fixed liabilities
  • Fixed liabilities/fixed assets
Ratio which comes under liquidity ratios is 
  • Debt ratio
  • Quick ratio
  • Proprietary ratio
  • Debt-equity ratio
Current Assets means........
  • Assets which can be converted into the cash within one year
  • Liabilities which are payable immediately
  • Liabilities which payable after one accounting year
  • Liabilities which are readable within 3 months
A person whose assets are less than business liabilities is known as insolvent.
  • True
  • False
The use of Debt funds with Equity capital is described as
(i) Financial leverage
(ii) Business leverage
(iii) Trading on equity
  • i,ii,iii
  • i or iii
  • ii
  • i or ii
Excess of liabilities over assets represents solvency of business.
  • True
  • False
Return on capital is computed as ________.
  • Net profit / capital
  • Gross profit / capital
  • Net profit / sales
  • Sales / capital
Cash in hand is the __________asset.
  • Least liquid
  • Most liquid
  • Fixed assets
  • Intangible asset
 The ability of the business to pay the amount due to stakeholders is calculated by ___________.
  • Solvency ratios
  • Activity ratios
  • Liquidity ratios
  • Profitability ratios
If outside liabilities and owners equity are added we get _________.
  • Total liabilities.
  • Net worth.
  • Shareholder fund.
  • Gross block.
Which of these transaction would effect current ratio
  • Realization of Bills receivable
  • Discounting of Bills receivable
  • Disposal of inventory
  • Withdraw of cash from bank for office purpose
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