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Published on: 03/08/2018
Based on the Accounting Ratio, some of the important questions are covered in this question paper. The questions are prepared from the book back and the creative questions
Download CBSE Class 12th Standard CBSE Accountancy question papers, sample papers, important questions, and previous year solved papers in PDF format. Get free study materials, NCERT solutions, and exam preparation resources for Class 12th Standard CBSE Accountancy
Questions + Answers key
Take MCQ Accountancy Test
1.
What does inventory turnover ratio indicate?
2.
Who are mainly interested in activity ratios?
3.
From the following information calculate any two of the following ratios:
(i) Current Ratio
(ii) Debt Equity Ratio
(iii) Operating Ratio
(iv)Operating Profit Ratio
Information:
Revenue from Operations Rs.1,00,000; Cost of Revenue from Operations was 80% of Revenue from Operations; Equity share Capital Rs.7,00,000; General Reserve Rs.30,000; Operating Expenses Rs.10,000; Quick Assets Rs.6,00,000; 9% Long-term borrowings Rs.5,00,000; Closing Inventory Rs.50,000; Prepaid Expenses Rs.10,000 and Current Liabilities Rs.4,00,000.
4.
From the following information, calculate Inventory Turnover Ratio:
| Particulars | Amt(Rs.) |
|---|---|
| Revenue from operations | Rs.5,00,000 |
| Average Inventory | Rs.68,750 |
| Gross Loss Ratio | 10% |
5.
The current ratio of a company is 2:1. State giving reasons which of the following would improve, reduce or not change the ratio:
(i) Repayment of Trade payables
(ii) Purchasing goods on credit
(iii) Sale of Motor vehicles at a loss of 20%
(iv) Sale of goods at a profit of 10%
(v) Payment of final dividend already declared
(vi) Redemption of debentures at a premium.
6.
The Debt Equity Ratio of a company is 1:2. State with reason which of the following transactions would (i) increase, (ii) decrease or (iii) not change in ratio:
(1) Issued equity shares of Rs.1,00,000
(2) Obtained a short-term loan from bank Rs.1,00,000
7.
Assuming that the Debt-Equity ratio is 2. State giving reasons whether this ratio would increase, decrease or remain unchanged in the following cases: (Any four)
(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.
(e) Sale of fixed asset at a loss of Rs.3,000.
(f) Conversion of debentures into equity shares.
(g) Payment to Creditors
(h) Sale of a fixed asset at Profit
8.
Calculate current ratio from the following:
| Particulars | Amt(Rs.) |
|---|---|
| Working Capital | Rs.5,00,000 |
| Trade Payables | Rs.2,00,000 |
| Short-term Provisions | Rs.50,000 |
9.
From the following information, Calculate Inventory Turnover Ratio, Operating Ratio, Gross Profit Ratio and ROI:
| Particulars | Rs |
|---|---|
| Opening Inventory | 28,000 |
| closing Inventory | 22,000 |
| Purchase of Stock-in-Trade | 46,000 |
| Revenue from operations | 80,000 |
| Carriage Inwards | 4,000 |
| Office Expenses | 4,000 |
| Selling & Distribution Expenses | 2,000 |
| Capital Employed | 2,00,000 |
10.
The current ratio of X Ltd. is 2:1. State with reason which of the following transaction would (i) increase; (ii) decrease or (iii) not change the ratio:
(1) Included in the trade payables was a bills payable of Rs.9,000 which was met on maturuty.
(2) Company issued 1,00,000 equity shares of Rs.10 each to the Vendors of machinery purchased.
11.
The ratio of Current Assets (Rs.6,00,000) to Current Liabilities (Rs.4,00,000) is 1.5:1. The accountant of the firm is interested in maintaining a Current ratio of 2:1, by paying off a part of the current liabilities. Compute the amount of current liabilities that should be paid, so that the current ratio at the level of 2:1 may be maintained.
12.
Current liabilities of a company are Rs.1,60,000. Its Liquid ratio is 1.5:1 and Current ratio is 2.1:1. Calculate Quick assets and Current assets.
13.
A business has a current ratio of 3:1 and quick ratio of 1:2:1. If the working capital is Rs.1,80,000, calculate the total current assets and value of inventory.
14.
A business has a current ratio of 3:1. Its networking capital is Rs.4,00,000 and its stocks are valued at Rs.2,50,000. Calculate the quick ratio. Is it satisfactory? Identify the value shown by the company in maintaining such a quick ratio
15.
What will be the operating profit ratio if operating ratio is 83.64%?
16.
The inventory turnover ratio of a company is 3 times. State, giving reason, whether the ratio improves, declines or does not change because of increase in the value of closing inventory by Rs.5,000.
17.
The debt-equity ratio of a company is 0.8:1. State whether the long-term loan obtained by the company will improve, decrease or not change the ratio.
1.
Inventory turnover ratio indicates whether the stock has been efficiently used or not.
2.
Management
3.
(i)Current Ratio=1.65:1(i.e., Rs.6,60,000\(\div\)Rs.4,00,000)
(ii)Debt Equity Ratio=0.5:1(i.e.,Rs.5,00,000\(\div\)10,00,000)
(iii) Operating Ratio=90%(i.e.,Rs.90,000\(\div\)Rs.1,00,000X100)
(iv)Operating Profit Ratio 10%(i.e.,100-90%)
4.
Inventory Turnover Ratio =\(Cost \ of \ Revenue \ From \ Operations\over Average \ Inventory\)
As cost of Revenue from operations=Revenue from Operations+Gross Loss
=Rs.5,00,000+Rs.50,000(i.e.,10% of Rs.5,00,000)=Rs.5,50,00
Thus, Inventory Turnover Ratio = \(Rs.5,50,000\over Rs.68,750\)=8 times
5.
(i) Improve
(ii) Reduce
(iii) Improve
(iv) Improve
(v)I mprove
(vi) Reduce
6.
(i) Increase: Reason: Long-term debts remains unchanged but shareholders' funds is increased.
(ii) No change: Reason: Neither the long-term debts nor shareholders' funds is affected.
7.
(a) Debt Equity Ratio will remain unchanged because this transaction involves fixed assets and creditors which neither affect the long-term debts or shareholders' funds.
(b) Debt equity ratio would increase because long-term debts increase without affecting shareholders' funds.
(c) Debt equity ratio would decrease because shareholders' funds increase without affecting long-term debts.
(d) Debt equity ratio would remain unchanged because reserves will reduce and share capital will increase in the same proportion.
(e) Debt equity ratio would increase as loss will reduce the shareholders' funds.
(f) Debt equity ratio would decrease because long-term debts decreases and shareholders' funds increases by the same amount.
(g) Debt equity ratio will remain unchanged because both long-term debts and shareholders' funds remain unchanged.
(h) Debt equity ratio would decrease because long-term debts will remain unchanged but shareholders' funds increases.
8.
Current Ratio = \(Current \ Assets\over Current \ Liabilities\)
Working Capital = Current Assets-Current Liabilities
Rs.5,00,000 = Current Assets-Rs.2,50,000
Current Assets = Rs.5,00,000+Rs.2,50,000=Rs.7,50,000
Current Liabilities = Rs.50,000+Rs.2,00,000=Rs.2,50,000
Current Ratio = \(RS.7,50,000\over Rs.2,50,000\)=3:1
9.
(i)Inventory Turnover Ratio 2.24times(i.e.,Rs.56,000 \(\div\)Rs.25,000)
(ii)Operating Ratio 77.5%(i.e.,Rs.62,000\(\div\)80,000X100).
(iii)Gross Profit Ratio 30%(i.e.,Rs.24,000\(\div\)80,000100),ROI 9% (i.e.,18,000\(\div\)2,00,000X100)
10.
(i) Increase: Reason: Both current assets and current liabilities will decrease with the same amount
(ii) No change: Reason: Neither current assets not current liabilities will change.
11.
Let payment for Current Liabilities= X
\(\frac { 2 }{ 1 } =\frac { Rs.6,00,000-X }{ Rs.4,00,000-X } \)
\(Rs.8,00,000-2X=Rs.6,00,000-X \)
\(X=\quad Rs.2,00,000,\)
12.
Current assets Rs.4,00,000 (i.e., Rs.1,60,000X2.5), Quick assets Rs.2,40,000 (i.e., Rs.1,60,000X1.5).
13.
Current Assets Rs.2,70,000 (i.e., Rs.90,000); Value of inventiry Rs.1,62,000 (i.e., 2,70,000 - Rs.1,08,000)
Hints: (i) Current Liabilities = Rs.90,000 (i.e. Rs. \(1,80,000\div 2\) )
(ii) Liquid Assets Rs.1,08,000 (i.e. Rs.90,000X 1.2)
14.
( )
Ouick ratio = 7:4
15.
( )
Operating Profit Ratio=100-83.64% =16.36%.
16.
( )
The inventory turnover ratio declines because of increase in the value of closing inventory means decline in sales volume
17.
( )
Debt Equity Ratio will improve because of increase in long-term debts.
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