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
Learning Games and Activities in Business Studies Class 12
MCQs on Analysis of Financial Statements