McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
Chapters
| 151. |
Single entry system is mixture of single entry, double entry and no entry. |
| A. | true |
| B. | may be false |
| C. | only true |
| D. | none of the above |
| Answer» A. true | |
| 152. |
They record a few translation completely just like the double entry system but a majority of the transactions are recorded only partially is known as incomplete records. |
| A. | true |
| B. | false |
| C. | both a and b |
| D. | none of the above |
| Answer» A. true | |
| 153. |
Under single entry system the profit and loss can be found out and also it’s comparison will be available. |
| A. | true |
| B. | false |
| C. | both and b |
| D. | only false |
| Answer» B. false | |
| 154. |
Profit and losses can’t be ascertained because Trading and Profit and loss account can’t be prepared. |
| A. | true |
| B. | false |
| C. | may be true |
| D. | may be false |
| Answer» B. false | |
| 155. |
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 | |
| 156. |
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 | |
| 157. |
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 | |
| 158. |
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 | |
| 159. |
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% | |
| 160. |
Liquid asset is determined by |
| A. | Current asset - stock - prepaid expense |
| B. | Current asset + Stock +prepaid expense |
| C. | Current asset + prepaid expense |
| D. | None of the above |
| Answer» A. Current asset - stock - prepaid expense | |
| 161. |
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 | |
| 162. |
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 | |
| 163. |
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 ) | |
| 164. |
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 | |
| 165. |
The ratio analysis is helpful to management in taking several decisions, but as a mechanical substitute for judgement and thinking, it is worse than useless. |
| A. | True |
| B. | False |
| C. | may be false |
| D. | both a and b |
| Answer» A. True | |
| 166. |
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 | |
| 167. |
If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is |
| A. | 24% |
| B. | 416% |
| C. | 60% |
| D. | None of the above |
| Answer» A. 24% | |
| 168. |
General profitability ratios are based on |
| A. | Investment |
| B. | Sales |
| C. | A & B |
| D. | None of the above |
| Answer» B. Sales | |
| 169. |
Financial Statement Analysis can be used for assessment of past performance only. |
| A. | false |
| B. | true |
| C. | either true or false |
| D. | only true |
| Answer» A. false | |
| 170. |
Ratio analysis is an important means of expressing the relationship between two numbers. |
| A. | true |
| B. | false |
| C. | may be false |
| D. | a and b both |
| Answer» A. true | |
| 171. |
Ratio analysis helps in investment decision. |
| A. | true |
| B. | false |
| C. | may be true |
| D. | a & b both |
| Answer» A. true | |
| 172. |
Liquid Ratio is also known as 2:1 ratio. |
| A. | false |
| B. | true |
| C. | either true or false |
| D. | none of the above |
| Answer» A. false | |
| 173. |
Current ratio indicates the solvency position of the business. |
| A. | true |
| B. | false |
| C. | may be false |
| D. | a and b |
| Answer» A. true | |
| 174. |
An ideal Liquid ratio is considered as 1:1 |
| A. | true |
| B. | false |
| C. | a and b both |
| D. | none of the above |
| Answer» A. true | |
| 175. |
The gross profit represents the net margin. |
| A. | false |
| B. | true |
| C. | both a and b |
| D. | may be false |
| Answer» A. false | |
| 176. |
Reliability of ratios depend upon the reliability of financial data. |
| A. | true |
| B. | false |
| C. | only a |
| D. | both a and b. |
| Answer» A. true | |
| 177. |
Ratio analysis ensures effective cost control. |
| A. | true |
| B. | false |
| C. | none of the above |
| D. | may be both |
| Answer» A. true | |
| 178. |
An ideal current ratio is considered as 1:2 |
| A. | false |
| B. | true |
| C. | may be true |
| D. | both a and b |
| Answer» A. false | |
| 179. |
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. | |
| 180. |
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. | |
| 181. |
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. | |
| 182. |
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. | |
| 183. |
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. | |
| 184. |
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. | |
| 185. |
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. | |
| 186. |
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. | |
| 187. |
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. | |
| 188. |
The ratio which determines the profitability from the shareholder’s point of view is . |
| A. | return on investment. |
| B. | gross profit ratio. |
| C. | return on shareholders funds. |
| D. | operating profit ratio. |
| Answer» C. return on shareholders funds. | |
| 189. |
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. | |
| 190. |
Preliminary expenses is an example of |
| A. | fixed assets. |
| B. | current assets. |
| C. | fictitious assets. |
| D. | current liabilities. |
| Answer» C. fictitious assets. | |
| 191. |
Prepaid expenses is an example of . |
| A. | fixed assets. |
| B. | current assets. |
| C. | fictitious assets. |
| D. | current liabilities. |
| Answer» B. current assets. | |
| 192. |
The ratio which is calculated to measure the productivity of total assets is |
| A. | return on equity. |
| B. | return on share holders funds. |
| C. | return on total assets. |
| D. | return on equity share holders’ funds. |
| Answer» C. return on total assets. | |
| 193. |
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. | pay out ratio |
| C. | earnings per share. |
| D. | price earnings ratio. |
| Answer» A. retained earnings ratio. | |
| 194. |
The ratio which indicates earnings per share reflected by the market price is . |
| A. | retained earnings ratio. |
| B. | pay out ratio. |
| C. | earnings per share. |
| D. | price earnings ratio. |
| Answer» D. price earnings ratio. | |
| 195. |
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. | |
| 196. |
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. | |
| 197. |
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. | |
| 198. |
Turnover ratio is also known as . |
| A. | activity ratios. |
| B. | solvency ratios. |
| C. | liquidity ratios. |
| D. | profitability ratios. |
| Answer» A. activity ratios. | |
| 199. |
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. | |
| 200. |
Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital investment? |
| A. | stock velocity ratio. |
| B. | debtors velocity ratio. |
| C. | creditors velocity ratio. |
| D. | working capital turnover ratio. |
| Answer» A. stock velocity ratio. | |
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