McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) .
Chapters
| 51. |
The major device for measuring the profitability of a firm over a defined period of time is the |
| A. | income statement. |
| B. | balance sheet. |
| C. | statement of cash flow. |
| D. | none of the above. |
| Answer» A. income statement. | |
| 52. |
The ________ does not represent continuing operations in any way, but is simply a snapshot of the total worth of a firm at a given point in time. |
| A. | income statement |
| B. | balance sheet |
| C. | sources and uses of funds statement |
| D. | none of the above |
| Answer» B. balance sheet | |
| 53. |
Cash inflows arise from _____ assets, ________ liabilities, and ___________ stockholders' equity. |
| A. | increasing; increasing; decreasing |
| B. | increasing; decreasing; decreasing |
| C. | decreasing; increasing; increasing |
| D. | decreasing; increasing; decreasing |
| Answer» C. decreasing; increasing; increasing | |
| 54. |
Which of the following is NOT a key ratio in the prediction of bankruptcy as developed by Edward Altman? |
| A. | debt to equity |
| B. | current ratio |
| C. | retained earnings as a percent of total assets |
| D. | total assets |
| Answer» A. debt to equity | |
| 55. |
__________ analysis is the process of studying a series of ratios for a company and/or industry over time. |
| A. | dupont |
| B. | trend |
| C. | common size |
| D. | all of the above. |
| Answer» B. trend | |
| 56. |
The statement of cash flows tells us |
| A. | accounting profit or loss |
| B. | how cash was created |
| C. | actual profit or loss |
| D. | two of the above |
| Answer» B. how cash was created | |
| 57. |
The primary sections of a statement of cash flows are: |
| A. | cash flows from investing, operating, and financing activities. |
| B. | cash flows from investing and operating activities plus investments. |
| C. | cash flows from investing, financing, and accounting activities. |
| D. | cash flows from investing, operating, financing, and accounting activities. |
| Answer» A. cash flows from investing, operating, and financing activities. | |
| 58. |
Which of the following are Non-current assets? |
| A. | land, building and plant |
| B. | leasehold property |
| C. | computer software |
| D. | all of the above |
| Answer» D. all of the above | |
| 59. |
Funds flow statements are prepared so as to |
| A. | to identify the changes in working capital |
| B. | to identify reasons behind change in working capital |
| C. | to know the item-wise outflow of funds during given period |
| D. | all of the above |
| Answer» D. all of the above | |
| 60. |
Financial statements are ____________. |
| A. | anticipated facts |
| B. | recorded facts |
| C. | estimated of facts |
| D. | unknown facts |
| Answer» B. recorded facts | |
| 61. |
Trend analysis is significant for ____________. |
| A. | forecasting and budgeting |
| B. | profit planning |
| C. | capital rationing |
| D. | working capital management |
| Answer» B. profit planning | |
| 62. |
In common size income statement analysis, which is taken as 100 percent? |
| A. | sales |
| B. | cost of goods sold |
| C. | purchases |
| D. | total assets |
| Answer» A. sales | |
| 63. |
Comparative statement analysis sheet is __________. |
| A. | vertical analysis |
| B. | horizontal analysis |
| C. | either vertical or horizontal analysis |
| D. | neither vertical nor horizontal analysis |
| Answer» B. horizontal analysis | |
| 64. |
Financial statements are meaningful and useful only when they are ___________. |
| A. | verified |
| B. | presented to owners |
| C. | analyzed and interpreted |
| D. | published |
| Answer» C. analyzed and interpreted | |
| 65. |
Vertical analysis is made on the basis of __________. |
| A. | single set of financial statements |
| B. | multiple sets of financial statements |
| C. | different schedules attached to financial statements |
| D. | similar set of financial statements |
| Answer» A. single set of financial statements | |
| 66. |
Horizontal analysis is done by analyzing ____________. |
| A. | quarterly statement |
| B. | half yearly statement |
| C. | financial statements of several years |
| D. | financial statements of a particular year |
| Answer» D. financial statements of a particular year | |
| 67. |
When the concept of ratio is defined in respect to the item shown in the financial statements, it is termed as |
| A. | accounting ratio |
| B. | financial ratio |
| C. | costing ratio |
| D. | none of the above |
| Answer» B. financial ratio | |
| 68. |
The relationship between two financial variables can be expressed in: |
| A. | pure ratio |
| B. | percentage |
| C. | rate or time |
| D. | all the above |
| Answer» D. all the above | |
| 69. |
Stock is considered as a liquid asset as anytime it can be converted into cash immediately. |
| A. | yes |
| B. | no |
| C. | only yes |
| D. | none of the above |
| Answer» B. no | |
| 70. |
Return on properties funds is also known as. |
| A. | return on net worth |
| B. | return on shareholders fun |
| C. | return on the shareholders’ investment |
| D. | all the above |
| Answer» D. all the above | |
| 71. |
What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold is Rs 2,00,000 & sales return is Rs10,000 ? |
| A. | 13 % |
| B. | 28% |
| C. | 26% |
| D. | 20% |
| Answer» D. 20% | |
| 72. |
Which of the following is not included in current assets. |
| A. | debtors |
| B. | stock |
| C. | cash at bank |
| D. | cash in hand |
| Answer» B. stock | |
| 73. |
Liquidity ratios are expressed in |
| A. | pure ratio form |
| B. | percentage |
| C. | rate or time |
| D. | none of the above |
| Answer» A. pure ratio form | |
| 74. |
Working capital turnover ratio can be determined by : |
| A. | ( gross profit / working capital ) |
| B. | ( cost of goods sold / net sales ) |
| C. | ( cost of goods sold / working capital) |
| D. | none of the above |
| Answer» A. ( gross profit / working capital ) | |
| 75. |
Determine Working capital turnover ratio if, Current asset is Rs 1,50,000, current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000. |
| A. | 5 times |
| B. | 6 times |
| C. | 3 times |
| D. | 1.5 times |
| Answer» B. 6 times | |
| 76. |
Profit for the objective of calculating a ratio may be taken as |
| A. | profit before tax but after interest |
| B. | profit before interest &tax |
| C. | profit after interest & tax |
| D. | all the above |
| Answer» D. all the above | |
| 77. |
If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is |
| A. | 24% |
| B. | 41% |
| C. | 60% |
| D. | none of the above |
| Answer» A. 24% | |
| 78. |
General profitability ratios are based on |
| A. | investment |
| B. | sales |
| C. | a & b |
| D. | none of the above |
| Answer» B. sales | |
| 79. |
Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales. |
| A. | 31 times |
| B. | 11 times |
| C. | 8 times |
| D. | 32 times |
| Answer» C. 8 times | |
| 80. |
The ratios which reveal the final result of the managerial policies and performance is . |
| A. | turnover ratios. |
| B. | profitability ratios. |
| C. | short term solvency ratio. |
| D. | long term solvency ratio. |
| Answer» B. profitability ratios. | |
| 81. |
Return on investment is a |
| A. | turnover ratios. |
| B. | short term solvency ratio. |
| C. | profitability ratios. |
| D. | long term solvency ratio. |
| Answer» C. profitability ratios. | |
| 82. |
Net profit ratio is a . |
| A. | turnover ratio. |
| B. | long term solvency ratio. |
| C. | short term solvency ratio |
| D. | profitability ratio. |
| Answer» D. profitability ratio. | |
| 83. |
Stock turnover ratio is a . |
| A. | turnover ratio. |
| B. | profitability ratio. |
| C. | short term solvency ratio. |
| D. | long term solvency ratio. |
| Answer» A. turnover ratio. | |
| 84. |
Current ratio is a |
| A. | short-term solvency ratio. |
| B. | long-term solvency ratio. |
| C. | profitability ratio. |
| D. | turnover ratio. |
| Answer» A. short-term solvency ratio. | |
| 85. |
Proprietary ratio is a |
| A. | short-term solvency ratio. |
| B. | long-term solvency ratio. |
| C. | profitability ratio. |
| D. | turnover ratio. |
| Answer» B. long-term solvency ratio. | |
| 86. |
Fixed assets ratio is a |
| A. | short-term solvency ratio. |
| B. | long-term solvency ratio. |
| C. | profitability ratio. |
| D. | turnover ratio. |
| Answer» B. long-term solvency ratio. | |
| 87. |
Fixed assets turnover ratio is a |
| A. | short-term solvency ratio. |
| B. | long-term solvency ratio. |
| C. | profitability ratio. |
| D. | turnover ratio. |
| Answer» D. turnover ratio. | |
| 88. |
The ratio which measures the profit in relation to capital employed is known as |
| A. | return on investment. |
| B. | gross profit ratio. |
| C. | operating ratio. |
| D. | operating profit ratio. |
| Answer» A. return on investment. | |
| 89. |
Return on equity is also called |
| A. | return on investment. |
| B. | gross profit ratio. |
| C. | return on shareholders’ funds. |
| D. | return on net worth. |
| Answer» D. return on net worth. | |
| 90. |
Preliminary expenses is an example of . |
| A. | fixed assets. |
| B. | current assets. |
| C. | fictitious assets. |
| D. | current liabilities. |
| Answer» C. fictitious assets. | |
| 91. |
Prepaid expenses is an example of . |
| A. | fixed assets. |
| B. | current assets. |
| C. | fictitious assets. |
| D. | current liabilities. |
| Answer» B. current assets. | |
| 92. |
The ratio which is calculated to measure the productivity of total assets is |
| A. | return on equity. |
| B. | return on shareholders’ funds. |
| C. | return on total assets. |
| D. | return on equity share holders’ funds. |
| Answer» C. return on total assets. | |
| 93. |
The ratio which shows the proportion of profits retained in the business out of the current year’s profits is |
| A. | retained earnings ratio. |
| B. | payout ratio |
| C. | earnings per share. |
| D. | price earnings ratio |
| Answer» A. retained earnings ratio. | |
| 94. |
The ratio establishes the relationship between profit before interest and tax and fixed interest charges is |
| A. | interest cover ratio. |
| B. | fixed dividend cover ratio. |
| C. | debt service coverage ratio. |
| D. | dividend yield ratio. |
| Answer» A. interest cover ratio. | |
| 95. |
The ratio shows the preference dividend as a proportion of profit available for shareholders is |
| A. | interest cover ratio. |
| B. | fixed dividend cover ratio. |
| C. | debt service coverage ratio. |
| D. | dividend yield ratio. |
| Answer» B. fixed dividend cover ratio. | |
| 96. |
The dividend is related to the market value of shares in . |
| A. | interest cover ratio. |
| B. | fixed dividend cover ratio. |
| C. | debt service coverage ratio. |
| D. | dividend yield ratio. |
| Answer» D. dividend yield ratio. | |
| 97. |
Turnover ratio is also known as . |
| A. | activity ratios. |
| B. | solvency ratios. |
| C. | liquidity ratios. |
| D. | profitability ratios. |
| Answer» A. activity ratios. | |
| 98. |
Inventory or stock turnover ratio is also called . |
| A. | stock velocity ratio. |
| B. | debtors velocity ratio. |
| C. | creditors velocity ratio. |
| D. | working capital turnover ratio. |
| Answer» A. stock velocity ratio. | |
| 99. |
The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is |
| A. | stock turnover ratio. |
| B. | debtors velocity ratio. |
| C. | creditors velocity ratio. |
| D. | working capital turnover ratio. |
| Answer» A. stock turnover ratio. | |
| 100. |
Sales – Gross Profit = . |
| A. | net profit. |
| B. | administrative expenses. |
| C. | cost of production. |
| D. | cost of goods sold. |
| Answer» D. cost of goods sold. | |
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