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Accounting Ratio

Board » Bihar Board » Class 12th » English Medium » Commerce » Accountancy » L-15: Accounting Ratio

Objective Questions (MCQs)

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VVI
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ID- 4908
BSEB, 2009, 13, 18, 19

1. The ideal liquid ratio is:

  • (A) 2:1
  • (B) 1:1
  • (C) 5:1
  • (D) 4:1
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Multiple Choice
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ID- 4909
BSEB, 2018

2. When the current ratio is 2:5 and the amount of current liabilities is ₹ 25,000, what is the amount of current assets?

  • (A) 62,500
  • (B) 12,500
  • (C) 10,000
  • (D) None of these
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VVI
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ID- 4910
BSEB, 2018

3. The term Quick Assets do not include:

  • (A) Stock
  • (B) Debtors
  • (C) B/R
  • (D) Cash and Bank Balance
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ID- 4911

4. Liquid Ratio:

  • (A) Current Assets / Current Liabilities
  • (B) Current Liabilities / Liquid Assets
  • (C) Liquid Assets / Current Liabilities
  • (D) None of these
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VVI
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ID- 4912
BSEB, 2016

5. The current Ratio includes:

  • (A) Stock
  • (B) Debtors
  • (C) Cash
  • (D) All of these
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Multiple Choice
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ID- 4913

6. Which of the following assets is not taken into consideration in calculating the acid-test ratio:

  • (A) Cash
  • (B) Bills Receivable
  • (C) Stock
  • (D) None of these
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ID- 4914

7. Two basic measures of liquidity are:

  • (A) Inventory Turnover and Current Ratio
  • (B) Current Ratio and Liquid Ratio
  • (C) Current Ratio and Average Collection Period
  • (D) Current Ratio and Debtors Turnover Ratio
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VVI
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ID- 4915

8. The profitability Ratio is generally shown in:

  • (A) Simple Ratio
  • (B) Percentage
  • (C) Times
  • (D) Equation
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ID- 4916

9. The .......... easy useful in evaluating credit and collection policies.

  • (A) Average Payment Period
  • (B) Current Ratio
  • (C) Average Collection Period
  • (D) Current Assets Turnover
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ID- 4917

10. The ............. of a business firm is measured by its ability to satisfy its short-term obligations as they become due.

  • (A) Activity
  • (B) Liquidity
  • (C) Debt
  • (D) Profitability
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VVI
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ID- 4918
BSEB, 2013, 18

11. The debt-equity ratio is:

  • (A) Liquidity Ratio
  • (B) Activity Ratio
  • (C) Solvency Ratio
  • (D) Operating Ratio
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ID- 4919

12. .................... are a measure of the speed with which various accounts are converted into sales or cash:

  • (A) Activity
  • (B) Liquidity
  • (C) Solvency
  • (D) Profitability
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VVI
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ID- 4920

13. Which of the following non-operating expense:

  • (A) Rent
  • (B) Selling Expenses
  • (C) Wages
  • (D) Loss on Sale of Machinery
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ID- 4921

14. When Cash is ₹ 10,000, Stock is ₹ 25,000, B/R is ₹ 5,000, Creditors is ₹ 22,000 and Bank Overdraft is ₹8,000, then the current ratio is:

  • (A) 2 : 1
  • (B) 4 : 3
  • (C) 3 : 4
  • (D) 1 : 2
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VVI
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ID- 4922

15. Cost of goods sold:

  • (A) Sales - Net profit
  • (B) Sales - Gross Profit
  • (C) Purchases - Opening Stock
  • (D) None of the above
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VVI
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ID- 4923

16. What does the Creditors Turnover Ratio take into account:

  • (A) Total credit purchases
  • (B) Total credit sales
  • (C) Total cash sales
  • (D) Total cash purchase
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ID- 4924

17. When opening stock is ₹50,000, closing stock ₹60,000, and the cost of goods sold is ₹ 2,20,000, then the stock turnover ratio is:

  • (A) 2 times
  • (B) 3 times
  • (C) 4 times
  • (D) 5 times
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VVI
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ID- 4925
BSEB, 2019

18. The operating ratio is:

  • (A) Profitability Ratio
  • (B) Activity Ratio
  • (C) Solvency Ratio
  • (D) None of these
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ID- 4926

19. To know the return on investment, by capital employed we mean:

  • (A) Net Fixed Assets
  • (B) Current Asset - Current Liabilities
  • (C) Gross Block
  • (D) Fixed Assets + Current Assets - Current Liabilities
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ID- 4927

20. Ratios based on figures of profit and loss as well as the Balance Sheet are:

  • (A) Profitability Ratio
  • (B) Operating Ratio
  • (C) Liquidity Ratio
  • (D) Composite Ratio
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VVI
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ID- 4928

21. Which of the following is an operating income?

  • (A) Sales of Merchandise
  • (B) Interest Income
  • (C) Dividend Income
  • (D) Profit on the sale of old car
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VVI
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ID- 4929

22. The following groups of ratios primarily measure risk:

  • (A) Liquidity, activity and profitability
  • (B) Liquidity, activity and common stock
  • (C) Liquidity, activity and debt
  • (D) Activity, debt and profitability
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ID- 4930

23. Debtors Turnover Ratio:

  • (A) Debtors / Cost of Sales
  • (B) Debtors / Sales
  • (C) Net Credit Sales / Average Trade Receivable
  • (D) Average Stock / Sales
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VVI
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ID- 4931

24. The gross profit ratio is the ratio of gross profit to:

  • (A) Net Cash Sales
  • (B) Net Credit Sales
  • (C) Closing Stock
  • (D) Net Total Sales
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ID- 4932

25. Profitability ratios and generally expressed in:

  • (A) Simple Ratio
  • (B) Percentage
  • (C) Times
  • (D) None of these
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ID- 4933

26. Liquid Ratio is also known as:

  • (A) Current Ratio
  • (B) Quick Ratio
  • (C) Capital Ratio
  • (D) None of these
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ID- 4934

27. Current assets include only those assets which are expected to be realized within .............

  • (A) 3 months
  • (B) 6 months
  • (C) 1 year
  • (D) 2 years
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VVI
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ID- 4935

28. Current Liabilities are to be payable within:

  • (A) 3 Months
  • (B) 6 Months
  • (C) 9 Months
  • (D) 12 Months
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ID- 4936

29. Working Capital is the:

  • (A) Cash and Bank Balance
  • (B) Capital borrowed from the Banks
  • (C) Difference between Current Assets and Current Liabilities
  • (D) Difference between Current Assets and Fixed Assets
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VVI
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ID- 4937

30. Which of the following transactions will improve the current ratio?

  • (A) Purchase of goods for cash
  • (B) Cash received from customers
  • (C) Payment of creditors
  • (D) Credit purchase of goods
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ID- 4938

31. The term 'Current Assets' include:

  • (A) Long-term investment
  • (B) Short-term investment
  • (C) Furniture
  • (D) Patents
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ID- 4939

32. The proprietary ratio indicates the relationship between the proprietor's funds and:

  • (A) Reserve
  • (B) Share Capital
  • (C) Total Assets
  • (D) Debentures
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ID- 4940

33. To test the liquidity of a concern which of the following ratios is useful?

  • (A) Capital Turnover Ratio
  • (B) Acid Test Ratio
  • (C) Stock Turnover Ratio
  • (D) Net Profit Ratio
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ID- 4941

34. The proprietary ratio is calculated by the following formula:

  • (A) Total Assets / Long-term Loans
  • (B) Debt / Shareholders' Funds
  • (C) Shareholders' Funds / Total Assets
  • (D) None of these
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ID- 4942

35. The satisfactory ratio between internal and external equity is:

  • (A) 1 : 2
  • (B) 2 : 1
  • (C) 3 : 1
  • (D) 4 : 1
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VVI
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ID- 4943

36. Liquid Assets include:

  • (A) Bills Receivable
  • (B) Debtors
  • (C) Cash
  • (D) All of these
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VVI
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ID- 4944
BSEB, 2010, 11, 13, 19

37. The ideal current ratio is:

  • (A) 2 : 1
  • (B) 1 : 2
  • (C) 3 : 2
  • (D) 3 : 4
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ID- 4945

38. The stock turnover ratio comes under:

  • (A) Liquidity Ratio
  • (B) Profitability Ratio
  • (C) Activity Ratio
  • (D) None of these
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ID- 4946

39. The term 'Current Liabilities' does not include:

  • (A) Sundry Creditors
  • (B) Debentures
  • (C) Bills payable
  • (D) Outstanding Expenses
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ID- 4947

40. Which one of the following ratios is most important in determining the long-term solvency of a company?

  • (A) Profitability Ratio
  • (B) Debt-equity Ratio
  • (C) Stock Turnover Ratio
  • (D) Current Ratio
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ID- 4948

41. The formula for ascertaining Total Assets to Debt Ratio is:

  • (A) Total Assets / Longterm Loans
  • (B) Tangible Assets / Longterm Loans
  • (C) Current Assets / Total Liabilities
  • (D) Total Assets / Total Liabilities
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ID- 4949

42. The .............. ratios are primarily measures of earning capacity of the business:

  • (A) Liquidity
  • (B) Activity
  • (C) Debt
  • (D) Profitability
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ID- 4950

43. The formula for finding out the Debt-equity ratio is:

  • (A) Long-term Debts / Shareholders' Funds
  • (B) Debentures / Equity Capital
  • (C) Net Profit / Total Capital
  • (D) None of these
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ID- 4951

44. The term fixed assets include:

  • (A) Cash
  • (B) Machinery
  • (C) Debtors
  • (D) Prepaid expenses
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ID- 4952

45. Which of the following is not operating expenses?

  • (A) Advertisement
  • (B) Loss on Sale of Car
  • (C) Salaries
  • (D) Distribution Expenses
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ID- 4953

46. Which of the following are liquid assets?

  • (A) Land
  • (B) Stock
  • (C) Building
  • (D) Debtors
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VVI
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ID- 4954

47. Current Ratio:

  • (A) Current Assets / Current Liabilities
  • (B) Liquid Assets / Current Assets
  • (C) Liquid Assets / Current Assets
  • (D) Fixed Assets / Current Assets
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ID- 4955

48. If sales are ₹ 4,20,000, sales returns are ₹ 20,000, and the cost of goods sold is ₹ 3,20,000, the gross profit ratio will be:

  • (A) 20 %
  • (B) 25 %
  • (C) 15 %
  • (D) 10 %
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ID- 4956

49. [Total Assets] ₹ 8,10,000 ; [Total Liabilities] ₹ 2,60,000 ; [Current Liabilities] ₹ 40,000 ; [Debt-equity ratio is]:

  • (A) 0.5 : 1
  • (B) 0.4 : 1
  • (C) 2.5 : 1
  • (D) 4 : 1
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ID- 4957

50. [Total Assets] ₹ 7,70,000 ; [Total Liabilities] ₹ 2,60,000 ; [Current Liabilities] ₹ 40,000 ; [Total Assets to Debt Ratio is]:

  • (A) 3.5 : 1
  • (B) 2.56 : 1
  • (C) 2.8 : 1
  • (D) 3 : 1
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