9.The inventory turnover ratio of a company is 3 times. Because revenues and expenses are the only transactions that affected stockholders’ equity during 20×1, … (A) Revenue from Operations – Net Profit (A) 1 : 1 Accounting Ratios 203 the financial statements, it is termed as accounting ratio. (C) As before 92. (C) 4.5 : 1 Current assets include only those assets which are expected to be realised within …………………….. (D) decrease gross profit ratio, 31. A firm’s cwTent assets are ₹3,60,000; Cur from operations is ₹12,00,000. Also, if credit purchases are not given, then all purchases are deemed to be on credit. (D) 1.2 : 1, 48. it measures how fast the stock is moving through the firm and generating sales. Opening Inventory of a firm is ₹80,000. (B) Fixed Assets/Current Assets current assets – current liabilities. Decrease in rent received by Rs 15,000 will not change the gross profit because rent received is a non-operating income. (B) Capital borrowed from the Banks In case, statement of profit and loss is given, cost of revenue from operations i.e. A firm makes credit revenue from operations of ₹2,40,000 during the year. (B) Short Term Debts/Equity Capital RBSE Class 12 Accountancy Chapter 11 Very Short Answer Questions. (D) ₹4,80,000, 73. The is a measure of liquidity which excludes generally the least liquid asset. (C) ₹6,85,000 Subsequently, it paid ₹50,000 to its trade payables. (a)Included in the trade payables was a bills payable of Rs 9,000 which was met on maturity. (A) 1.75 : 1 (i)Current ratio (B) 85% (C) ₹80,000 (B) Average Inventory/Cost of Revenue from Operations The best app for CBSE students now provides accounting for partnership firm’s fundamentals class 12 Notes latest chapter wise notes for quick preparation of CBSE board exams and school-based annual examinations. (Delhi 2009) For example, if the gross profit of the business is Rs. When the concept of ratio is defined in respected to the items shown in the financial statements, it is termed as a) Accounting ratio b) Financial ratio c) Costing ratio d) None of the above View Answer / Hide Answer Home >> Category >> Finance (MCQ) Questions and answers >> Ratio Analysis 1) Determine Debtors turnover ratio if, closing debtors is Rs 40,000, Cash sales is 25% of credit sales and excess of closing debtors over opening debtors is Rs 20,000. (B) Liquidity Ratio Fixed Assets ?3,30,000; Current Assets ₹1,90,000; Preliminary Expenses ₹30,000; Equity Share Capital ₹2,44,000; Preference Share Capital ₹1,70,000; Reserve Fund ₹58,000. (C) 82% Liquid Assets : (C) Cost of Revenue from Operations/Average Inventory (D) 1.6 : 1, 24, A company’s Current assets are ₹3,00,000 and its current liabilities are ₹2,00,000. However, we will notﬁ nd many absolute answers. (C) ₹80,000 (Delhi2012) (D) 6 months, 97. (D) 2 : 1, 63. (A) Debtors (A) ₹1,50,000 (iv)Interest coverage ratio This ratio expresses the relationship between net profit before interest and tax and interest payable on long-term debts. Liquid Ratio is equal to liquid assets divided by : Total Assets to Debt Ratio=Total Assets/Long-term Debts (D) Cost of Production/Net revenue from operations. (B) 2.5 : 1 (D) Current ratio and Average Collection period, 2. (A) ₹1,15,000 20,000 to the creditors, both the total of current assets and total of current liabilities will be reduced by the same amount. (D) ₹51,000 and ₹49,000, 78. (b)Current Assets [Current investments + Inventories (including spare parts and loose tools) + Trade Receivables + Cash and Cash Equivalents + Short-term Loans and Advances + Other Current Assets] Reason Sale of furniture at cost will increase the quick assets, but the current liabilities remain unchanged. shareholders’ funds. Effect No change (A) ₹38,000 Quick Ratio is also known as : (B) ₹36,000 Problem 1: The following is the Balance Sheet of a company as on 31st March: Problem 2: From the following particulars found in the Trading, Profit and Loss Account of A Company Ltd., work out the operation ratio […] (A) 2.3 : 1 (B) ₹96,000 (D) 3 : 1, (B) Solvency Ratios Information What will be the amount of Gross Profit, if revenue from operations are ₹6,00,000 and Gross Profit Ratio 20% of revenue from operations? (B) ₹22,000 (B) 1.9 : 1 (A) Increase Current ratio (C) 2.5 : 1 Liquid Assets do not include : (A) ₹33,000 Revenue from Operations – Gross Profit. Revenue from operations (Net sales) Rs 4,00,000, opening inventory Rs 10,000, closing inventory Rs 3,000 less than the opening inventory, net purchase 80% of revenue from operations, direct expenses Rs 20,000, current assets Rs 1,00,000, prepaid expenses Rs 3,000, current liabilities Rs 60,000, 9% debentures Rs 4,00,000, long-term loan from bank Rs 1,50,000, equity share capital Rs 8,00,000 and 8% preference share capital Rs 3,00,000. Effect Reduce Its Current Ratio will be : (B) 4 : 1 21.From the following information, calculate any two of the following ratios Ratio Analysis M02_MCNA8932_01_SE ... answers to these and other questions. (D) 9 Times, 84. Inventory Turnover Ratio is: (a)Non-current Assets [Fixed assets (Tangible and intangible assets) + Non-current Investments + Long-term Loans and Advances Opening Inventory ₹1,00,000; Closing Inventory ₹1,20,000; Purchases ₹20,00,000; Wages ₹2,40,000; Carriage Inwards ₹1,50,000; Selling Exp. (ii)Working capital turnover ratio (B) Purchase of goods for cash (i)Current ratio/Working capital ratio This ratio establishes relationship between current assets and current liabilities and is used to assess the short-term financial position of the business concern. Ans. Ans. (i)Debt to Equity ratio It establishes the relationship between long-term debt (external equities) and the equity (internal equities) i.e. Cash Balance ₹5,000; Trade Payables ₹40,000; Inventory ₹50,000; Trade Receivables ₹65,000 and Prepaid Expenses are ₹10,000. (B) ₹1,57,500 (D) None of the above, 27. (B) Current ratio and Quick ratio (B) 80% (C) ₹1,20,000 (A) 3 months State giving reason whether the ratio will improve, decline or not change on payment of dividend by the company. On the basis of following information received from a firm, its Proprietary Ratio will be : (C) 8 times 6.The gross profit ratio of a company is 50%. (B) 52 : 1 (D) 20%, 102. (B) 2.3 : 1 (b)Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs 9,700. Ans. Current Ratio will be : Average Inventory ₹60,000; Inventory Turnover Ratio 8; Gross Profit 20% on revenue from operations; what will be Gross Profit? = 100- 83.64 = 16.36%, 3.What will be the operating profit ratio, if operating ratio is 88.94%? Its current liabilities are ?80,000. (C) 125% NCERT Solutions for Class 12 Accountancy Part II Chapter 5 Accounting Ratios. (Delhi 2010; All India 2010) or (i)Short-term borrowings. Ans. Reason Shareholders’ funds are increased by the issue of new shares for cash, but the long-term debts remain unchanged. (i) Purchase of machinery for cash (ii)Debt equity ratio (B) Increase (C) Current Assets – Inventory – Prepaid Exp. Information (D) ₹24,000, 45. Debt equity ratio will improve as the long-term debts will decrease, but total shareholders’ funds remain unchanged. Items Included in Long-term Debts It includes long-term borrowings and long-term provisions. If its Current Liabilities are ₹2,00,000, what will be the value of Inventory? Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Cost of revenue from operations ₹6,00,000; Inventory Turnover Ratio 5; Find out the value of opening inventory, if opening inventory is ₹8,000 less than ” the closing inventory. Statement Analysis Tools and Accounting Ratios Class 12 Accountancy Extra Questions. Fixed Assets ₹5,00,000; Current Assets ₹3,00,000; Equity Share Capital ₹4,00,000; Reserve ₹2,00,000; Long-term Debts ₹40,000. Patents and Copyrights fall under the category of: share capital, reserves and surplus). Ans. or long-term borrowings and long-term provisions). 5,000. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12, Classification of Accounting Ratios (D) 2.05 : 1, 38. (A) 11%. (B) ₹4,80,000 Inventory is ₹30,000. 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