Class 12 Accountancy MCQs Ratio Analysis questions based on examination for practice by the students to prepare for final exams. Take care of the time taken and accuracy of work to score high in exams.
Class 12 Accountancy MCQs Ratio Analysis
- Two basic measures of liquidity are:
a) Inventory turnover and Current ratio
b) Current ratio and Quick ratio
c) Gross Profit ratio and Operating ratio
d) Current ratio and average Collection period
2. A Company’s liquid assets are ₹4,00,000 and its current liabilities are ₹2,00,000. Thereafter, it paid ₹1,00,000 to its trade payables. Quick ratio will be:
a) 33:1
b) 5:1
c) 67:1
d) 3:1
3. 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. Proprietory Ratio will be:
a) 75%
b) 80%
c) 125%
d) 133%
4. Equity Share Capital ₹20,00,000, Reserves ₹5,00,000, Debentures ₹10,00,000, Current Liabilities ₹8,00,000. Debt-equity ratio will be:
a) 0.4 : 1
b) 0.32 : 1
c) 0.72 : 1
d) 0.5 : 1
5. Total revenue from operations ₹9,00,000, Cash revenue from operations ₹3,00,000, Debtors ₹1,00,000, Bills Receivable ₹20,000. Trade Receivables Turnover Ratio will be:
a) 5 Times
b) 6 Times
c) 5 Times
d) 9 Times
6. Opening Inventory ₹75,000, Closing Inventory ₹1,25,000, Purchases ₹6,00,000, Carriage ₹25,000, Wages ₹2,00,000. Inventory Turnover Ratio will be:
a) 6.6 Times
b) 7.4 Times
c) 7 Times
d) 7.75 Times
7. A firm’s Credit Revenue from Operations is ₹3,60,000, Cash Revenue from Operations is ₹90,000. Cost of Revenue from Operations is ₹3,60,000. Its Gross Profit Ratio will be:
a) 11%
b) 15%
c) 18%
d) 20%
8. Revenue from Operations ₹8,00,000, Gross Profit 20%, Office Expenses ₹60,000, Selling Expenses ₹40,000. Calculate operating ratio.
a) 80%
b) 85%
c) 92.5%
d) 96.33%
9. The gross profit ratio of a company is 50%. State with reason whether the decrease in rent received by ₹15,000 will……. the ratio.
a) increase
b) decrease
c) not change
10. What will be the impact of issuing ₹5, 00,000 equity shares to vendor for building purchased on the debt and equity of a company?
a) Debt will increase and equity will decrease.
b) Debt will remain same and equity will increase.
c) Debt will decrease and equity will decrease.
d) Debt will remain same and equity will increase.
Class 12 Accountancy MCQs Ratio Analysis
11. Assertion - Ratio analysis is a process of determining and interpreting relationships between the items of financial statements to provide meaningful understanding of the performance and financial position of an enterprise.
Reason - It is a technique of analyzing the financial statements by computing the various ratios.
a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
b) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion.
c) Assertion is true, but Reason is false
d) Assertion is false, but Reason is true.
12. Assertion - Accounting Ratio can be used to know the strong and weak points of business.
Reason - Ratio Analysis is a technique of Analysis of Financial Statement
a) Both Assertion and Reason are true and Reason is not the correct explanation of Assertion.
b) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
c) Assertion is true, but Reason is false
d) Assertion is false, but Reason is true.
13. Which one of the following is correct?
(i) Quick Ratio can be more than Current Ratio.
(ii) High Inventory Turnover ratio is good for the organisation, except when goods are bought in small lots or sold quickly at low margins to realise cash.
(iii) Sum of Operating Ratio and Operating Profit ratio is always 100%.
a) All are correct.
b) Only (i) and (iii) are correct.
c) Only (ii) and (iii) are correct.
d) Only (i) and (ii) are correct
14. Which of the following is not a Solvency Ratio?
a) Interest Coverage Ratio
b) Return on Investment
c) Debt to Capital Employed Ratio
d) Total Assets to Debt Ratio
15. Revenue from Operations ₹6,00,000; Gross Profit 25% on Cost. Gross Profit Ratio will be:
a) 15%
b) 25%
c) 20%
d) 30%
16. Debt-Equity Ratio of CAE Ltd. is 2,1. Which of the following would decrease the ratio:
a) Purchase of Fixed Asset on a credit of 2 months
b) Purchase of Fixed Asset on a long-term deferred payment basis
c) Issue of New Shares for Cash
d) Issue of Bonus Shares
17. Inventory Turnover Ratio of a company is 5 times. Which of the following transactions will decrease this ratio:
a) Purchase of Stock-in-Trade ₹50,000
b) Purchase Returns ₹20,000
c) Revenue from Operations on sale of Stock-in-Trade costing ₹20,000 for ₹25,000
d) Stock-in-Trade costing ₹10,000 distributed as free samples
18. Current ratio of a Ltd. Company is 3:2. Accountant wants to maintain it at 2:1. Following options are available.
(i) He can repay Bills Payable
(ii) He can purchase goods on credit
(iii) He can take short term loan
Choose the correct option:
a) Only (i) is correct
b) Only (ii) is correct
c) Only (i) and (iii) are correct
d) Only (ii) and (iii) are correct
19. ............ is included in current assets while preparing balance sheet as per revised Schedule III but excluded from current assets while calculating Current Ratio:
a) Debtors
b) Cash and Cash Equivalent
c) Loose tools and Stores and spares
d) Prepaid Expense
20. Debt-Equity Ratio of PTD Ltd is 3 is to 1. Which of the following will result in decrease in this ratio:
a) Issue of Debentures for Cash of ₹2,00,000
b) Issue of Debentures of ₹3,00,000 to Vendors from whom Machinery was purchased
c) Goods purchased on Credit of ₹1,00,000
d) Issue of Equity Shares of ₹2,00,000
Class 12 Accountancy MCQs Ratio Analysis
21. Which one of the following is correct?
(i) Aggregate of shareholders' funds and long term debt is known as capital employed.
(ii) The main objective of computing operating profit ratio is to determine the operational efficiency of the management.
(iii) Operating ratio = 100 - Operating profit ratio.
(iv) While calculating Trade Receivables Turnover Ratio, 'Provision for Doubtful Debts' is deducted from the total amount of Trade Receivables.
a) All are Correct
b) All are incorrect
c) Only (i) and (iii) are correct
d) Except (iv) all are correct.
22. Which of the following equations is correct :
a) Cost of Revenue from Operations = Revenue from Operations + Gross Profit
b) Cost of Revenue from Operations = Opening Inventory Net Purchases + Direct Expenses - Closing Inventory
c) Cost of Revenue from Operations = Opening Inventory + Closing Inventory
d) Cost of Revenue from Operations = Revenue from Operations - Gross Profit
More questions will be added from time to time...
Class 12 Accountancy MCQs Ratio Analysis - Answers
- b) Current ratio and Quick ratio
- d) 3:1
- a) 75%
- a) 0.4 : 1
- a) 5 Times
- d) 7.75 Times
- d) 20%
- c) 92.5%
- c) not change
- b) Debt will remain same and equity will increase.
- a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
- b) Both Assertion and Reason are true and Reason is the correct explanation of Assertion.
- c) Only (ii) and (iii) are correct.
- b) Return on Investment
- c) 20%
- c) Issue of New Shares for Cash
- a) Purchase of Stock-in-Trade ₹50,000
- a) Only (i) is correct
- c) Loose tools and Stores and spares
- d) Issue of Equity Shares of ₹2,00,000
- d) Except (iv) all are correct.
- d) Cost of Revenue from Operations = Revenue from Operations - Gross Profit
Class 12 Accountancy MCQs Comparative Statements
Class 12 Accountancy MCQs Cash Flow Statement
Learning Games and Activities in Business Studies Class 12