McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
| 51. |
The asset, the amount of which can be realized within a period of one year are known as ---------------- |
| A. | Current liability |
| B. | Current asset |
| C. | Liquid liability |
| D. | Fixed asset |
| Answer» B. Current asset | |
| 52. |
The ideal current ratio is ------------- |
| A. | 2:1 |
| B. | 1:1 |
| C. | 1:2 |
| D. | 1:3 |
| Answer» A. 2:1 | |
| 53. |
The ratio which shows the relationship between borrowed funds and owners capital is --------------- |
| A. | Proprietary ratio |
| B. | Debt equity ratio |
| C. | Capital gearing ratio |
| D. | Fixed asset ratio |
| Answer» B. Debt equity ratio | |
| 54. |
Proprietary ratio measures the relationship between share holder fund and ------------------ |
| A. | Total asset |
| B. | Fixed asset |
| C. | Current asset |
| D. | Fictious asset |
| Answer» A. Total asset | |
| 55. |
The relationship between total outside liabilities and total assets can be indicated through ------------ |
| A. | Fixed asset ratio |
| B. | Solvency ratio |
| C. | Fixed asset turn over ratio |
| D. | Proprietary ratio |
| Answer» B. Solvency ratio | |
| 56. |
Debt service ratio is also known as -------------- |
| A. | Interest coverage ratio |
| B. | Dividend payout ratio |
| C. | Solvency ratio |
| D. | Debtors turn over ratio |
| Answer» A. Interest coverage ratio | |
| 57. |
Debt equity ratio is an example of ---------------- ratios |
| A. | Balance sheet ratio |
| B. | Profit & loss account ratio |
| C. | Mixed ratio |
| D. | Liquidity ratio |
| Answer» A. Balance sheet ratio | |
| 58. |
Income tax payable come under ------------------ |
| A. | Long term liability |
| B. | Long term fund |
| C. | Current liability |
| D. | Other liabilities |
| Answer» C. Current liability | |
| 59. |
Stock and prepaid expanses are not included in ---------------- |
| A. | Current asset |
| B. | Fixed asset |
| C. | Current liability |
| D. | Quick asset |
| Answer» D. Quick asset | |
| 60. |
In a sound business, acid test ratio ------------------- is considered satisfactory |
| A. | 1:2 |
| B. | 2:1 |
| C. | 1:1 |
| D. | 0.5:1 |
| Answer» C. 1:1 | |
| 61. |
Cost of good sold+operating expanses=------------------------- |
| A. | Total cost |
| B. | Cost of product |
| C. | Cost of sales |
| D. | Operating cost |
| Answer» D. Operating cost | |
| 62. |
Example of activity ratios ------------------------ |
| A. | Gross profit ratio |
| B. | Net profit ratio |
| C. | Operating ratio |
| D. | Stock turn over ratio |
| Answer» D. Stock turn over ratio | |
| 63. |
Example of leverage ratio |
| A. | Debtors velocity |
| B. | Stock turnover ratio |
| C. | Current ratio |
| D. | Solvency ratio |
| Answer» D. Solvency ratio | |
| 64. |
Current ratio is an example of -------------------- |
| A. | Leverage ratio |
| B. | Liquidity ratio |
| C. | Activity ratio |
| D. | Turnover ratio |
| Answer» B. Liquidity ratio | |
| 65. |
Stock turn over ratio is an example of ------------------- |
| A. | Liquidity ratio |
| B. | Leverage ratio |
| C. | Profitability ratios |
| D. | Activity ratios |
| Answer» D. Activity ratios | |
| 66. |
Ratio analysis is a study of relationship among various --------------- factors in a business |
| A. | Operational |
| B. | Official |
| C. | Financial |
| D. | Others |
| Answer» C. Financial | |
| 67. |
Liquidity ratios measure the --------- solvency of a firm |
| A. | Long term |
| B. | Short term |
| C. | Average |
| D. | Others |
| Answer» B. Short term | |
| 68. |
By computing current ratio ---------------- solvency of a concern is assessed |
| A. | Short term |
| B. | Long term |
| C. | Liquidity |
| D. | Profitability |
| Answer» A. Short term | |
| 69. |
---------------- ratio studies the firm’s ability to meet its long term financial position |
| A. | Liquidity ratio |
| B. | Profitability |
| C. | Activity |
| D. | Leverage |
| Answer» D. Leverage | |
| 70. |
Satisfactory level of debt equity ratio is -------------------- |
| A. | 1:1 |
| B. | 3:1 |
| C. | 2:1 |
| D. | 1:2 |
| Answer» C. 2:1 | |
| 71. |
Operating ratio establishes the relationship between --------------- and net sales |
| A. | Cost of goods sold |
| B. | Cost of sales |
| C. | Cost of production |
| D. | Operating cost |
| Answer» D. Operating cost | |
| 72. |
For dividend yield ratio -------------- price of the equity shares is taken into consideration |
| A. | Market |
| B. | Cash |
| C. | Cost |
| D. | None of the above |
| Answer» A. Market | |
| 73. |
Coverage of fixed assets by shareholder’s equity is a good tests of---------------- |
| A. | solvency |
| B. | liquidity |
| C. | Activity |
| D. | profitability |
| Answer» A. solvency | |
| 74. |
Net worth refers to owner’s-------------------------- |
| A. | Equity |
| B. | Solvency |
| C. | Liability |
| D. | None of these |
| Answer» A. Equity | |
| 75. |
Ratio to assess the short term debt paying capacity of a firm is---------- |
| A. | Debt equity ratio |
| B. | Propriety ratio |
| C. | Liquid ratio |
| D. | Solvency ratios |
| Answer» C. Liquid ratio | |
| 76. |
The ratio which is used to ascertain the soundness of the long term financial position is------------ |
| A. | Debt equity ratio |
| B. | Liquidity ratio |
| C. | Activity ratio |
| D. | Gross profit ratio |
| Answer» A. Debt equity ratio | |
| 77. |
If the current assets and working capital of a company are rs.80,000 and rs.50000 then current liability will be------------- |
| A. | Rs.1,00,000 |
| B. | Rs.1,30,000 |
| C. | Rs.70000 |
| D. | Rs.30000 |
| Answer» D. Rs.30000 | |
| 78. |
The ratio which is a good indicator to maintain the correct selling price and efficiency of trading activity is------ |
| A. | Net profit ratio |
| B. | Gross profit ratio |
| C. | Current ratio |
| D. | Liquid ratios |
| Answer» B. Gross profit ratio | |
| 79. |
Return on investment is a---------------- |
| A. | Profit and loss account ratio |
| B. | Balance sheet ratio |
| C. | Combined ratio |
| D. | Position statement ratio |
| Answer» C. Combined ratio | |
| 80. |
Debtors turnover ratio also known as---------- |
| A. | Payable turnover |
| B. | Receivable turnover ratio |
| C. | Creators turnover ratio |
| D. | Debtors velocity |
| Answer» B. Receivable turnover ratio | |
| 81. |
The operating profit and net sale of a firm are rs.2,00,000 and rs.10,00,000 respectively then operating ratio will be |
| A. | 20% |
| B. | 5% |
| C. | 50% |
| D. | 20% |
| Answer» A. 20% | |
| 82. |
The ratio which indicates how quickly debtors are converted into cash is--------- |
| A. | Receivable turnover ratio |
| B. | Inventory turnover ratio |
| C. | Working capital turnover ratio |
| D. | Creditors turnover ratio |
| Answer» A. Receivable turnover ratio | |
| 83. |
Net capital employed is equal to --------------- |
| A. | Total assets minus liabilities |
| B. | Fixed asset plus net working capital |
| C. | Total asset minus long-term liabilities |
| D. | Total assets |
| Answer» B. Fixed asset plus net working capital | |
| 84. |
Ratio of net profit before interest and tax to sales is------------------------------ |
| A. | Solvency ratio |
| B. | Capital gearing |
| C. | Operating profit ratio |
| D. | None of these |
| Answer» C. Operating profit ratio | |
| 85. |
Lower stock turnover ratio indicates------------------------------- |
| A. | Solvency position |
| B. | Monopoly situation |
| C. | Over investment in inventory |
| D. | None of these |
| Answer» C. Over investment in inventory | |
| 86. |
Collection of book debts----- |
| A. | Has no effect on current ratio |
| B. | Has decreased in current ratio |
| C. | Has increased in current ratio |
| D. | None of these |
| Answer» A. Has no effect on current ratio | |
| 87. |
Debt equity ratio is a-------------------------------------- |
| A. | Profitability ratio |
| B. | Turnover ratio |
| C. | Short term solvency ratio |
| D. | Long term solvency ratio |
| Answer» D. Long term solvency ratio | |
| 88. |
Market price per share divided by earnings per share is------- |
| A. | Price earning ratio |
| B. | Return on equity |
| C. | Market test ratio |
| D. | Book value per share |
| Answer» A. Price earning ratio | |
| 89. |
Solvency ratio indicates----------------- |
| A. | Credit worthiness |
| B. | Activity |
| C. | Profitability |
| D. | None of these |
| Answer» A. Credit worthiness | |
| 90. |
Current ratio shows----- |
| A. | The change in gross profit |
| B. | The working capital position |
| C. | The liquidity of assets |
| D. | The change in net profit |
| Answer» B. The working capital position | |
| 91. |
Current ratio is 4:1, the amount of current liabilities is Rs.12000 the amount of working capital is----- |
| A. | Rs.48,000 |
| B. | Rs.36000 |
| C. | Rs.30000 |
| D. | Rs.60000 |
| Answer» A. Rs.48,000 | |
| 92. |
Stock turnover ratio is used to determine -----------------------of an enterprise |
| A. | Profitability |
| B. | Liquidity& solvency |
| C. | Efficiency |
| D. | Growth |
| Answer» C. Efficiency | |
| 93. |
Working capital is expressed as------ |
| A. | Current asset-fixed asset |
| B. | Fixed assets-current liabilities |
| C. | Current assets-current liabilities |
| D. | None of these |
| Answer» C. Current assets-current liabilities | |
| 94. |
Dividend yield is an example for------ratio |
| A. | Solvency |
| B. | Liquidity |
| C. | Market strength |
| D. | Net worth |
| Answer» C. Market strength | |
| 95. |
Debtors turnover ratio is used to calculate------ |
| A. | efficiency |
| B. | solvency |
| C. | liquidity |
| D. | profitability |
| Answer» A. efficiency | |
| 96. |
Rol measures----- |
| A. | Profitability in relation to investment |
| B. | Profitability in relation to sales |
| C. | Operating efficiency |
| D. | Long term solvency |
| Answer» A. Profitability in relation to investment | |
| 97. |
Debtors turnover ratio measures---------- |
| A. | Short term solvency |
| B. | Operating efficiency |
| C. | Long term solvency |
| D. | Credit policy |
| Answer» D. Credit policy | |
| 98. |
Fund flow refers to change in----- |
| A. | Working capital |
| B. | Fixed capital |
| C. | Current capital |
| D. | Increase in working capital |
| Answer» A. Working capital | |
| 99. |
Depreciation is sometimes treated as -------of funds |
| A. | Outflow |
| B. | Use |
| C. | Source |
| D. | No change |
| Answer» C. Source | |
| 100. |
Salary outstanding is----- of funds |
| A. | Source |
| B. | Inflow |
| C. | Application |
| D. | No change |
| Answer» C. Application | |
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