Accountancy Chapter 5 (Part 1) – Accounting ratios MCQ Question and Answers – MCQs for Practice

1. Higher the ______ More Favourable it is to the company Ratio.

2. It is a Significance of Inventory Turnover Ratio n?

3. The ______ is useful in evaluating credit and collection policies.

4. There is no universal yardstick which specifies the level of ideal ratios. There is no standard list of the levels universally acceptable, and, in India, the industry averages are also not available. This Statements Relates to ________ of Ratio.

5. Tenzin Ltd. Which is Finance Based Ecommerce Company has a current ratio of 3.5:1 and quick ratio of 2:1. If excess of current assets over quick assets represented by inventories is Rs. 24,000, What will be the value of current assets?

6. Which Analysis Pertains to Comparison Of a firm Present Ratio With its past Ratios?

7. ______are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.

8. Gross profit ratio of a company was 25%. Its credit revenue from operations was Rs. 20,00,000 and its cash revenue from operations was 10% of the total revenue from operations. If the indirect expenses of the company were Rs. 50,000, calculate its net profit ratio.

9. Interest Coverage Ratio = Net Profit before Interest Tax / ______

10. It refers to the analysis of profits in relation to revenue from operations or funds (or assets) employed in the business and the ratios calculated to meet this objective are known as ______

11. Financial statements prepared by a business enterprise in the corporate sector are published and are available to the ______

12. Credit Sales Rs. 700000, Cash Sales Rs. 100000. Cost of Revenue from Operations is Rs. 640000, then Gross Profit Ratio will be_______

13. Quick Assets Include all Current Assets which are quickly convertible into cash but it Excludes

14. Question

15. Which one is Advantage of Ratio Analysis?

16. Highmoney Finance Co. extends Its credit terms of 40 days to its customers. Its credit collection would be considered poor if its average collection period was

17. The _______ratios provide the information critical to the long-run operation of the firm

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

19. Current Ratio is 3:4, Current Liabilities Rs. 24000, the amount of current assets will be____

20. Book Value per share = _________/Number of Equity Shares