Hello Students we are providing mcqs of class 12 Accountancy lesson 4 Accounting Ratios These objective questions is very helpful for your study because these question cover a wide topic and easy to understand
Why mcqs of class 12 Accountancy lesson 4 Accounting Ratios is important ?
- these mcqs are important because these questions cover a wide topic of the chapter
- mcqs are easy to understand
- mcqs break the big topic in some small topic so they are easy to learn
- they give a short revision at the time of class 12 Accountancy exam
How to get pdf of class 12 Accountancy lesson 4 Accounting Ratios mcqs
We are providing 3 types of format from where you can learn and download the mcqs of class 12 Accountancy Accounting Ratios
1. You can watch our video on Youtube
2. You can get mcqs at our website
3. you can download pdf of mcqs
We have provided objective questions of class 12 Accountancy lesson 4 Accounting Ratios with answers these questions help to understand the concept very easy for student
Increasing role of mcqs in board exam
recently many examination board have declared that their question paper of exam contain more than 25% objective questions so by the marks purpose mcqs of class 12 Accountancy lesson 4 Accounting Ratios is very important
We hope that the provided mcqs of class 12 Accountancy lesson 4 Accounting Ratios are very helpful for your study and you get full marks in class 12 Accountancy exam if you have any queries about objective questions of class 12 Accountancy chapter 4 Accounting Ratios you can comment below the post or you can go to our contact us page
Question 1
Loss by fire, loss by theft etc are ___
A. Operating expenses
B. Non operating expenses
C.Financial expenses
D.All of these
SOLUTION
Solution : B
Loss by fire, loss by theft etc are Non Operating expenses
Question 2
Net operating profit ratio determines___
A.Overall efficiency of the business
B.Overall efficiency of the management
C.Overall efficiency of the external market
D.None of these
SOLUTION
Solution : A
Net operating profit ratio determines overall efficiency of the business.
Question 3
___ is the ratio of cost of goods sold plus operating expenses to net sales.
A.Operating ratio
B.Net worth ratio
C.Net worth ratio
D.None of these
SOLUTION
Solution : A
Operating ratio is the ratio of cost of goods sold plus operating expenses to net sales.
Question 4
cost of goods sold plus operating expenses = ___
A.Gross profit margin
B.Working capital
C.Operating cost
D.All of these
SOLUTION
Solution : C
cost of goods sold + operating expenses = Operating cost
Question 5
This ratio primarily indicates the rate of external funds in financing the assets and the extent of coverage of their debts by the assets. This ratio is ____.
A.Current ratio
B.Total assets to debt ratio
C.Debt equity ratio
D.None of these
SOLUTION
Solution : B
This ratio primarily indicates the rate of external funds in financing the assets and the extent of coverage of their debts are covered by assets. This ratio is Total assets to debt ratio.
Question 6
Proprietary ratio is expressed in terms of ___
A.Percentage
B.Times
C.Days
D.None of these
SOLUTION
Solution : A
Proprietary ratio is expressed in terms of Percentage
Question 7
Interest coverage ratio is expressed in terms of ___
A.Percentage
B.Times
C.Days
D.None of these
SOLUTION
Solution : B
Interest coverage ratio is expressed in terms of Times
Question 8
Turnover ratios are also known as___
A.Activity ratios
B.Performance ratios
C.Both Activity ratios & Performance ratios
D.All of these
SOLUTION
Solution : C
Turnover ratios are also known as both Activity ratios & Performance ratios
Question 9
Employee Benefit expenses is 10,000;
Cost of revenue from operation = 60,000;
Opening Inventory is 30,000 and
Average Inventory is 20,000.
Calculate Inventory Turnover Ratio
A.1/3 times
B.3 times
C.1/6 times
D.2 times
SOLUTION
Solution : B
Inventory Turnover Ratio = 60,000 / 20,000 = 3 times
Question 10
The ___________ measures the activity of a firm’s inventory.
A.average collection period
B.inventory turnover
C.current ratio
D.liquid ratio
SOLUTION
Solution : B
The inventory turnover measures the activity of a firm’s inventory.
Question 11
Trade receivables turnover ratio is expressed in terms of ___
A.Percentage
B.Times
C.Days
D.None of these
SOLUTION
Solution : B
Receivables turnover ratio is expressed in terms of times
Question 12
Determine debtors turnover ratio if, closing debtors is Rs 40,000, total sales is Rs 4,00,000. Credit sales is 25% of total sales and excess of closing debtors over opening debtors is Rs 30,000.
A.4 Times
B.2 times
C.6 times
D.8 times
SOLUTION
Solution : A
Credit Sales = 25% of Rs, 4,00,000
= Rs 1,00,000.
Closing Debtors = Rs 40,000
Opening Debtors = Rs 40,000 - Rs 30,000
= Rs 10,000
Average Debtors = (Rs 40,000 + Rs 10,000)/2
= Rs 25,000
Debtors turover ratio = Rs 1,00,000 / Rs 25,000
= 4 times
Question 13
Number of days or months / Trade receivables turnover ratio is used for calculating ___
A.Average collection period
B.Debtors velocity
C.Average payment period
D.None of these
SOLUTION
Solution : A
Number of days or months / Trade receivables turnover ratio gives the average collection period
Question 14
Trade payables turnover ratio is expressed in terms of ___
A.Percentage
B.Times
C.Days
D.None of these
SOLUTION
Solution : B
Payables turnover ratio is expressed in terms of times.
Question 15
Total Purchases - Cash Purchases - Purchase Returns =
A.Net purchases
B.Net credit purchases
C.Gross purchases
D.None of these
SOLUTION
Solution : B
Net credit purchases = Total Purchases - Cash Purchases - Purchase Returns
Question 16
A ______ working capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.
A.Low
B.High
C.Moderate
D.None of these
SOLUTION
Solution : A
A low working capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.
Question 17
Determine working capital turnover ratio if, current assets is Rs 1,50,000, current liabilities is Rs 1,00,000 and revenue from operations is Rs 3,00,000.
A.4 Times
B.2 times
C.6 times
D.None of these
SOLUTION
Solution : C
Working capital = Rs 1,50,000 - Rs 1,00,000
= Rs 50,000
Revenue from operations = Rs 3,00,000
Working capital turnover ratio
= Rs 3,00,000/ Rs 50,000 = 6 times
Question 18
Given that net sales is Rs 1,20,000 and gross profit is Rs 30,000. The gross profit ratio is ___
A.24%
B.25%
C.40%
D.44%
SOLUTION
Solution : B
Gross Profit Ratio
=
Gross Profit
Net Sales×100=25
%
Question 19
___ = 100% - Operating ratio
A.Operating ratio
B.Net worth ratio
C.Operating profit ratio
D.None of these
SOLUTION
Solution : C
Operating profit ratio + Operating ratio = 100%
Question 20
What will be the operating profit ratio, if operating ratio is 83.64%?
A.11.06%
B.83.64%
C.16.36%
D.None of these
SOLUTION
Solution : C
Operating Profit Ratio = 100% - operating ratio
=100%- 83.64% = 16.36%
Question 21
Net profit ratio determines _______________
A.working efficiency of the management
B.overall efficiency of the business
C.working efficiency of the internal management
D.None of these
SOLUTION
Solution : B
Net profit ratio determines the overall efficiency of the business.
Question 22
If sales is Rs 10,00,000, sales returns is Rs 50,000, Profit Before Tax is Rs 2,00,000, Income tax is 40%, Net profit ratio is___
A.12.63 %
B.12%
C.10 %
D.24%
SOLUTION
Solution : A
Tax = 40% of 2,00,000 = Rs 80,000
Net profit after tax = Rs 1,20,000
Net sales = Rs 10,00,000 - Rs 50,000
= Rs 9,50,000
Question 23
Return on Investment measures a relationship between which of the following?
A.Net Profit before Interest and Tax and Capital employed
B.Net Profit after Interest and Tax and Capital employed
C.ROI = Net Profit before Interest and Tax / Total Assets
D.None of these
SOLUTION
Solution : A
Return on Investment measures a relationship between Net Profit before Interest & Tax and Capital Employed
Question 24
Calculate the return on capital employed (ROI) from the following information:
Capital employed is 1,00,000
Net profit on sales is 6%
Gross Profit Margin 90,000 (15%)
A.13%
B.28%
C.36%
D.20%
SOLUTION
Solution : C
Revenue from operations = 90,000/15% = 6,00,000
Net profit = 6,00,000*6% = 36000
ROI= (36,000/1,00,000)*100 = 36%
Question 25
Net Profit before interest and tax Rs.80,000; Equity share capital (12000 shares of Rs.10 each) 1,20,000; 10% Preference Share Capital Rs.50,000; 12% Debentures Rs.1,00, 000; Reserves and Surplus Rs.130,000; Tax rate 50%; Calculate Return on Investment.
A.30%
B.25%
C.35%
D.20%
SOLUTION
Solution : D
Net PBIT = Rs 80,000
Capital Employed = Rs 1,20,000 + Rs 50,000 + Rs 1,00,000 + Rs 1,30,000 = Rs 4,00,000
Question 26
If selling price is fixed 25% above the cost, the Gross Profit ratio is ___
A.12.5%
B.25%
C.50%
D.20%
SOLUTION
Solution : D
Let cost = x
Then, revenue from operations = 1.25 x
Profit = 0.25 x
Gross profit ratio = 0.25x1.25x×100=20%
Question 27
What will be the gross profit ratio if, total sales is Rs 2,60,000, cost of net goods sold is Rs 2,00,000 and Sales return is Rs 10,000?
A.13%
B.28%
C.26%
D.20%
SOLUTION
Solution : D
Net Sales = Rs 2,60,000 - Rs 10,000 = Rs 2,50,000
Cost of goods sold = Rs 2,00,000
Gross Profits = Rs 2,50,000 - Rs 2,00,000 = Rs 50,000
Question 28
What will be the operating profit ratio, if operating ratio is 88.94%?
A.11.06%
B.83.64%
C.16.36%
D.None of these
SOLUTION
Solution : A
Operating ratio + operating profit ratio = 100%
So, operating profit ratio =100%- 88.94% = 11.06%
Question 29
The _________ ratios are primarily measures of returns.
A.liquidity
B.activity
C.debt
D.profitability
SOLUTION
Solution : D
The profitability ratios are primarily measures of returns.
Question 30
The _________ is useful in evaluating credit and collection policies.
A.average payment period
B.current ratio
C.average collection period
D.current asset turnover
SOLUTION
Solution : C
The average collection period is useful in evaluating credit and collection policies .
mcqs for cbse term 1 exam
mcqs for cbse term 1 exam class 12
mcqs for cbse term 1 exam class 12 Accountancy
mcqs for cbse term 1 exam class 12 Accountancy lesson 4
mcqs for cbse term 1 exam class 12 Accountancy lesson 4 Accounting Ratios
mcqs for cbse term 1 exam class 12 Accountancy chapter 4
mcqs for cbse term 1 exam class 12 Accountancy chapter 4 Accounting Ratios
MCQ'S TEST
mcqs test
class 12
class 12 Accountancy
class 12 Accountancy chapter 4
class 12 Accountancy chapter 4 Accounting Ratios
class 12 Accountancy lesson 4
class 12 Accountancy lesson 4 Accounting Ratios
class 12 mcqs
class 12 Accountancy mcqs
class 12 Accountancy chapter 4 mcqs
class 12 Accountancy chapter 4 Accounting Ratios mcqs
class 12 objective questions
class 12 Accountancy objective questions
class 12 Accountancy chapter 4 objective questions
class 12 Accountancy chapter 4 Accounting Ratios objective questions
mcqs of class 12
mcqs of class 12 Accountancy
mcqs of class 12 Accountancy chapter 4
mcqs of class 12 Accountancy chapter 4 Accounting Ratios
objective questions of class 12
objective questions of class 12 Accountancy
objective questions of class 12 Accountancy chapter 4
objective questions of class 12 Accountancy chapter 4 Accounting Ratios
class 12 Accountancy lesson 4
class 12 Accountancy lesson 4 Accounting Ratios
class 12 Accountancy lesson 4 mcqs
class 12 Accountancy lesson 4 Accounting Ratios mcqs
class 12 Accountancy lesson 4 objective questions
class 12 Accountancy lesson 4 Accounting Ratios mcqs objective questions
mcqs of class 12 Accountancy lesson 4
mcqs of class 12 Accountancy lesson 4 Accounting Ratios
objective questions of class 12 Accountancy lesson 4
objective questions of class 12 Accountancy lesson 4 Accounting Ratios
most important questions of class 12
most important questions of class 12 Accountancy
most important questions of class 12 Accountancy chapter 4
most important questions of class 12 Accountancy chapter 4 Accounting Ratios
most important questions of class 12 Accountancy lesson 4
most important questions of class 12 Accountancy lesson 4 Accounting Ratios
mcqs test,
class 12 term 1 exam mcqs,
class 12 Accountancy term 1 exam mcqs,
class 12 Accountancy Accounting Ratios term 1 exam mcqs,
class 12 Accountancy chapter 4,
class 12 Accountancy chapter 4 Accounting Ratios,
cbse term 1 exam mcqs of class 12 Accountancy Accounting Ratios,
objective questions of class 12 Accountancy chapter 4,
mcqs of class 12 Accountancy Accounting Ratios,
class 12 Accountancy lesson 4 Accounting Ratios mcqs,
mcqs of Accounting Ratios 12 Accountancy,