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Published on: 06/09/2019
Accounting Ratio
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.
The quick ratio of Z Ltd is 1:1. State with reason which of the following transactions would
(a) increase, (b) decrease or (c) not change the ratio
(i) Included in the trade payables was a bills payable of ₹3,000 which was met on maturity.
(ii) Debentures of ₹50,000 were converted into equity shares.
2.
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.
3.
Calculate Current Ratio from the following information:
Inventory Turnover :4 times
Inventory in the beginning was Rs 20,000 less than Inventory at the end.
Revenue from Operation Rs.6,00,000.
Groos Profit Ratio 25%.
Current Liabilities Rs.60,000.
Quick Ratio 0.75:1.
4.
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.
5.
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
6.
What will be the operating profit ratio if operating ratio is 83.64%?
7.
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.
8.
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.
9.
The credit sales of Mis Sun Farms Ltd amounted to Rs.10,50,000. Its debtors and bills receivables at the end of the accounting period amounted to Rs.1,00,000 and Rs.75,000 respectively. Calculate its debtor's turnover ratio and also collection period in terms of days, weeks and months.
10.
The current assets of Maxell Ltd are Rs.10,00,000 and its current liabilities are Rs.4,00,000. Find its current ratio. Is it satisfactory? What value is exhibited by the company on maintaining such a ratio?
11.
Calculate the current ratio from the information given below
Trade receivables Rs.4,50,000, sundry debtors Rs. 2,50,000, inventories Rs.5,00,000, marketable securities Rs.1,50,000, cash and cash equivalents Rs.2,00,000, prepaid expenses Rs.10,000, accrued income Rs.15,000, sundry creditors Rs.1,00,000, bills
payable Rs.1,50,000, outstanding expenses Rs.50,000, debentures Rs.5,00,000, preliminary expenses Rs.5,000, goodwill Rs.50,000.
12.
From the following balance sheet of Aspect Ltd, calculate the current ratio.
Balance Sheet
as at ...
| Particulars | Note No. | Amt(Rs) |
| I Equity and liabilities | ||
| 1. Shareholders' Funds | ||
| (a) Share Capital | 15,00,000 | |
| (b) Reserves and Surplus | (1,50,000) | |
| 2. Non-current Liabilities | ||
| Long-term Borrowings | 8,25,000 | |
| 3. Current Liabilities | ||
| (a) Short-term Borrowings | 7,50,000 | |
| (b) Trade Payables | 1,50,000 | |
| (c) Short-term Provisions | 2,25,000 | |
| Total | 33,00,000 | |
| II Assets | ||
| 1. Non-current Assets | ||
| (a) Fixed Assets | ||
| (i) Tangible Assets | 13,50,000 | |
| (ii) Intangible Assets | 1,50,000 | |
| (b) Non-current Investments | 1,50,000 | |
| 2. Current Assets | ||
| (a) Current Investments | 3,00,000 | |
| (b) Inventories | 4,50,000 | |
| (c) Trade Receivables | 5,25,000 | |
| (d) Cash and Cash Equivalents | 3,75,000 | |
| Total | 33,00,000 |
1.
(i) Not change the ratio : Simultaneous decrease in both current assets and current liabilities will not effect the quick ratio.
(ii) Not change the ratio : Debentures converted into shares do not effect either quick assets or current liabilities. Therefore, quick ratio will not be effected.
2.
(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.
3.
Liquid Assets Rs.45,000 (i.e., 75XRs.60,000), Closing Inventory Rs.1,22,500, Current Assets Rs.1,67,500 (i.e., Rs.45,000+Rs.1,22,500), Current Ratio 2.79:1 (i.e., \(Rs.1,67,500\div 60,000\) )
[Hints: (i) Cost of revenue from operations Rs.4,50,000 i.e., Rs.6,00,000 (Revenue from operations) - Rs 1,50,000 (G.P. i.e., 25% of Rs.6,00,000)
(ii) Average Inventory Rs.1,12,500 (i.e., \(Rs.4.50,000\div 4\) )]
4.
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)
5.
( )
Ouick ratio = 7:4
6.
( )
Operating Profit Ratio=100-83.64% =16.36%.
7.
( )
The inventory turnover ratio declines because of increase in the value of closing inventory means decline in sales volume
8.
( )
Debt Equity Ratio will improve because of increase in long-term debts.
9.
Debtors' turnover ratio=Net credit sales / Average trade receivables \(=\frac { 10,50,000 }{ (1,00,000+75,000) } =\frac { 10,50,000 }{ 1,75,000 } =6times\)
Average Collection Period
In days=\(\frac { 365 }{ 6 } =60.83days\)
In months=\(\frac { 12 }{ 6 } =2\quad months\)
In weeks=\(\frac { 52 }{ 6 } =8.67weeks\)
10.
Current ratio=\(\frac { Current\quad assets }{ Current\quad liabilities } =\frac { 10,00,000 }{ 4,00,000 } =2.5\)
Yes, it is satisfactory, as it exceeds the ideal ratio of 2: l. Value exhibited by Maxell Ltd
is ability to honour their debts on time.
11.
Current ratio = 4.42 : 1
12.
Current ratio=1.4:1
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