McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Bachelor of Banking and Insurance (BBI) , Bachelor of Commerce (B Com) .
Chapters
| 251. |
Coverage of fixed assets by shareholder’s equity is a good tests of---------------- |
| A. | solvency |
| B. | liquidity |
| C. | Activity |
| D. | profitability |
| Answer» A. solvency | |
| 252. |
Net worth refers to owner’s-------------------------- |
| A. | Equity |
| B. | Solvency |
| C. | Liability |
| D. | None of these |
| Answer» A. Equity | |
| 253. |
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 | |
| 254. |
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 | |
| 255. |
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 | |
| 256. |
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 | |
| 257. |
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 | |
| 258. |
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 | |
| 259. |
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% | |
| 260. |
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 | |
| 261. |
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 | |
| 262. |
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 | |
| 263. |
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 | |
| 264. |
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 | |
| 265. |
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 | |
| 266. |
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 | |
| 267. |
Solvency ratio indicates----------------- |
| A. | Credit worthiness |
| B. | Activity |
| C. | Profitability |
| D. | None of these |
| Answer» A. Credit worthiness | |
| 268. |
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 | |
| 269. |
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 | |
| 270. |
Stock turnover ratio is used to determine -----------------------of an enterprise |
| A. | Profitability |
| B. | Liquidity& solvency |
| C. | Efficiency |
| D. | Growth |
| Answer» C. Efficiency | |
| 271. |
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 | |
| 272. |
Dividend yield is an example for------ratio |
| A. | Solvency |
| B. | Liquidity |
| C. | Market strength |
| D. | Net worth |
| Answer» C. Market strength | |
| 273. |
Debtors turnover ratio is used to calculate------ |
| A. | efficiency |
| B. | solvency |
| C. | liquidity |
| D. | profitability |
| Answer» A. efficiency | |
| 274. |
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 | |
| 275. |
Debtors turnover ratio measures---------- |
| A. | Short term solvency |
| B. | Operating efficiency |
| C. | Long term solvency |
| D. | Credit policy |
| Answer» D. Credit policy | |
| 276. |
Fund flow refers to change in----- |
| A. | Working capital |
| B. | Fixed capital |
| C. | Current capital |
| D. | Increase in working capital |
| Answer» A. Working capital | |
| 277. |
Depreciation is sometimes treated as -------of funds |
| A. | Outflow |
| B. | Use |
| C. | Source |
| D. | No change |
| Answer» C. Source | |
| 278. |
Salary outstanding is----- of funds |
| A. | Source |
| B. | Inflow |
| C. | Application |
| D. | No change |
| Answer» C. Application | |
| 279. |
Any gain on sale of non-current asset should be ----- from the net profit for determining funds from operation |
| A. | Deducted |
| B. | Added |
| C. | Increased |
| D. | None of these |
| Answer» A. Deducted | |
| 280. |
Asset sold on credit is---- of funds |
| A. | Application |
| B. | Uses |
| C. | Source |
| D. | Decrease |
| Answer» C. Source | |
| 281. |
Furniture sold for cash -----funds flow |
| A. | Increases |
| B. | Decreases |
| C. | Deducted |
| D. | None of these |
| Answer» A. Increases | |
| 282. |
Goodwill is a ---------------------transaction |
| A. | Current |
| B. | Noncurrent |
| C. | Fixed |
| D. | None of these |
| Answer» B. Noncurrent | |
| 283. |
When one account is current and another a non-current It results in-------------------- |
| A. | Flow of fund |
| B. | Increase of fund |
| C. | Decrease of fund |
| D. | None of these |
| Answer» A. Flow of fund | |
| 284. |
To arrive at funds from operation ,non-cash expenses must be added to---------- |
| A. | Net profit |
| B. | Gross profit |
| C. | Operating profit |
| D. | None of these |
| Answer» A. Net profit | |
| 285. |
Fund flow statement is accompanied by a schedule of----------------------------- |
| A. | Changes in working capital |
| B. | Flow of funds |
| C. | Increase in fund |
| D. | Decrease in fund |
| Answer» A. Changes in working capital | |
| 286. |
Goods purchased on credit-----------inflow of funds |
| A. | Does not result |
| B. | Does result |
| C. | Change |
| D. | None of these |
| Answer» A. Does not result | |
| 287. |
----------account is prepared to know funds from operation |
| A. | Profit & Loss appropriation account |
| B. | Profit and loss account |
| C. | Trading account |
| D. | Profit & Loss adjustment account |
| Answer» D. Profit & Loss adjustment account | |
| 288. |
Increases in current liabilities --------------working capital |
| A. | Increase |
| B. | Decreases |
| C. | Added |
| D. | None of these |
| Answer» B. Decreases | |
| 289. |
Increase in current assets-------------working capital |
| A. | Increases |
| B. | Decreases |
| C. | Deducts |
| D. | Reduces |
| Answer» A. Increases | |
| 290. |
Decrease in current liabilities --------------------working capital |
| A. | Increases |
| B. | Decrease |
| C. | Deducts |
| D. | Reduces |
| Answer» A. Increases | |
| 291. |
Net increase in working capital results in----------------of funds |
| A. | source |
| B. | Inflow |
| C. | no change |
| D. | application |
| Answer» D. application | |
| 292. |
Net decrease in working capital results in --------------------of funds |
| A. | Source |
| B. | Application |
| C. | No change |
| D. | None of these |
| Answer» B. Application | |
| 293. |
-------------------means transfer of economic value of firm from one asset or equity to another. |
| A. | Flow of funds |
| B. | Uses of fund |
| C. | Inflow of funds |
| D. | Application of funds |
| Answer» A. Flow of funds | |
| 294. |
Funds from operations are --------------of funds |
| A. | Application |
| B. | Uses |
| C. | Sources |
| D. | No change |
| Answer» C. Sources | |
| 295. |
In the fund flow statement, depreciation is---------------- |
| A. | Deducted from net profit |
| B. | Added to net profit |
| C. | Sources of working capital |
| D. | Ignored |
| Answer» B. Added to net profit | |
| 296. |
Which of the following is non-current asset |
| A. | Goodwill |
| B. | Debtors |
| C. | Stock |
| D. | Prepaid rent |
| Answer» A. Goodwill | |
| 297. |
Which of the following will affect the flow of fund |
| A. | a transaction affecting current and non-current accounts |
| B. | a transaction affecting both non-current accounts |
| C. | a transaction affecting both current accounts |
| D. | both a) and b) |
| Answer» A. a transaction affecting current and non-current accounts | |
| 298. |
Which of the following is an application of fund |
| A. | Sale of plant |
| B. | Issue of shares |
| C. | Purchase of funds |
| D. | Payment of creditors |
| Answer» C. Purchase of funds | |
| 299. |
Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000, the impact on net working capital would be------------------------- |
| A. | No change in working capital |
| B. | Decrease of working capital by Rs.80,000 |
| C. | Increase of working capital by Rs.40,000 |
| D. | None of these |
| Answer» A. No change in working capital | |
| 300. |
Gross profit are Rs.50,000 and expenses not result in the application of funds are Rs.10000 funds from operation will be |
| A. | Rs.60000 |
| B. | Rs.50000 |
| C. | Rs. 40000 |
| D. | Rs. 30000 |
| Answer» A. Rs.60000 | |
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