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
| 351. |
Disclose accounting information |
| A. | Balance sheet |
| B. | Trading account |
| C. | Profit and Loss Account |
| D. | Financial statements |
| Answer» D. Financial statements | |
| 352. |
Afford full diagnosis of the profitability and financial position |
| A. | Preparation of Profit and Loss Account |
| B. | Balance Sheet |
| C. | Final Accounts |
| D. | Analysis of financial statements |
| Answer» D. Analysis of financial statements | |
| 353. |
Study of the trend of the same items of two or more balance sheets |
| A. | Common size Profit and Loss A/C |
| B. | Common size balance sheet |
| C. | Comparative Income statement |
| D. | Comparative Balance Sheet |
| Answer» D. Comparative Balance Sheet | |
| 354. |
Expressed as a percentage of each asset to total |
| A. | Common size P/L A/C |
| B. | Common size Balance Sheet |
| C. | Comparative Income Statement |
| D. | Trend analysis |
| Answer» B. Common size Balance Sheet | |
| 355. |
Ratios of different items for various periods are calculated and compared |
| A. | Common size |
| B. | Comparative |
| C. | Trend analysis |
| D. | Ratio analysis |
| Answer» D. Ratio analysis | |
| 356. |
Yard stick which measures relationship between two variables |
| A. | Financial statements |
| B. | Ratio |
| C. | Fund Flow analysis |
| D. | Cash flow analysis |
| Answer» B. Ratio | |
| 357. |
The ratio which depicts the relationship between two items, one of which is drawn from the Balance Sheet and the other from the revenue account |
| A. | Current ratio |
| B. | Equity Ratio |
| C. | Net Profit ratio |
| D. | Debtors Turn over Ratio |
| Answer» D. Debtors Turn over Ratio | |
| 358. |
The ratio of liquid asset to current liabilities |
| A. | Quick ratio |
| B. | Current ratio |
| C. | Absolute liquid ratio |
| D. | Combined ratio |
| Answer» A. Quick ratio | |
| 359. |
Equity includes -------------- |
| A. | Equity share capital |
| B. | Equity share capital + Preference share capital+-fictitious asset |
| C. | Equity capital + Preference share capital + reserves And surplus-fictious asset |
| D. | Equity capital + Preference share capital |
| Answer» C. Equity capital + Preference share capital + reserves And surplus-fictious asset | |
| 360. |
The ratio which shows the relationship b/w share holder’s fund and total assets |
| A. | Debit equity ratio |
| B. | Proprietary ratio |
| C. | Solvency ratio |
| D. | Fixed asset |
| Answer» B. Proprietary ratio | |
| 361. |
Long term solvency of a firm can be measured by |
| A. | Current ratio |
| B. | Net profit ratio |
| C. | Gross profit ratio |
| D. | Debt equity ratio |
| Answer» D. Debt equity ratio | |
| 362. |
The ratio that shows the relationship between fixed asset to share holders fund |
| A. | Fixed asset to net worth |
| B. | Fixed asset ratio |
| C. | Fixed assets turn over ratio |
| D. | Net worth ratio |
| Answer» A. Fixed asset to net worth | |
| 363. |
The index of efficiency and profitability of the business |
| A. | Operating ratio |
| B. | Operating profit ratio |
| C. | Expense ratio |
| D. | Net profit ratio |
| Answer» D. Net profit ratio | |
| 364. |
The ratio that includes whether investment in inventory is efficiently used or not |
| A. | Inventory turnover ratio |
| B. | Working capital turn over ratio |
| C. | Fixed asset turn over ratio |
| D. | Activity ratio |
| Answer» A. Inventory turnover ratio | |
| 365. |
Comparison and interpretation of ratio is known as --------------------- |
| A. | Fund flow analysis |
| B. | Cash flow analysis |
| C. | Ratio analysis |
| D. | Trend analysis |
| Answer» C. Ratio analysis | |
| 366. |
Powerful tool for analyzing financial statement is ---------- |
| A. | Trend analysis |
| B. | Ratio analysis |
| C. | Analysis |
| D. | Interpretation |
| Answer» B. Ratio analysis | |
| 367. |
The relationship between two amount or variables is measured with the help of ------------ |
| A. | Ratio |
| B. | Trend |
| C. | Comparative |
| D. | Common size |
| Answer» A. Ratio | |
| 368. |
The main aim of the ratio analysis is to help the ----------of the firm |
| A. | Owners |
| B. | Officials |
| C. | Departments |
| D. | Management |
| Answer» D. Management | |
| 369. |
Ratios help the management in evolving market strategies through ----------- |
| A. | Inter firm comparison |
| B. | Intra firm comparison |
| C. | Ratios |
| D. | None of the above |
| Answer» A. Inter firm comparison | |
| 370. |
Ratios may be used as a measure of ------------- |
| A. | Efficiency |
| B. | Solvency |
| C. | Profitability |
| D. | None of the above |
| Answer» A. Efficiency | |
| 371. |
An example of Balance Sheet ratio is --------------- |
| A. | Net profit ratio |
| B. | Inventory turn over ratio |
| C. | Current ratio |
| D. | Fixed asset turn over ratio |
| Answer» C. Current ratio | |
| 372. |
Income statement ratios are also called ----------- |
| A. | Operating ratio |
| B. | Liquidity ratio |
| C. | Activity ratio |
| D. | Trend ratio |
| Answer» A. Operating ratio | |
| 373. |
Leverage ratios are also known as -------------- ratios |
| A. | Short term solvency ratios |
| B. | Long term solvency ratios |
| C. | Solvency ratio |
| D. | Liquidity ratio |
| Answer» B. Long term solvency ratios | |
| 374. |
The ratios that shows the capacity of the business unit to meet its short term obligation out of its short term resources is known as -------------- |
| A. | Solvency ratio |
| B. | Leverage ratio |
| C. | Liquidity ratio |
| D. | Trend Ratio |
| Answer» C. Liquidity ratio | |
| 375. |
The ratio that highlight the end result of business activities are known as ---------------- ratios |
| A. | Liquidity |
| B. | Leverage |
| C. | Activity |
| D. | Profitability |
| Answer» D. Profitability | |
| 376. |
The efficiency of the management can be measured with the help of ------------------ |
| A. | Activity ratio |
| B. | Leverage ratio |
| C. | Liquidity ratio |
| D. | Profitability ratio |
| Answer» A. Activity ratio | |
| 377. |
The ratio of current asset to current liability is known as -------------- |
| A. | Liquid ratio |
| B. | Current ratio |
| C. | Absolute liquid ratio |
| D. | Turn over ratio |
| Answer» B. Current ratio | |
| 378. |
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 | |
| 379. |
The ideal current ratio is ------------- |
| A. | 2:1 |
| B. | 1:1 |
| C. | 1:2 |
| D. | 1:3 |
| Answer» A. 2:1 | |
| 380. |
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 | |
| 381. |
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 | |
| 382. |
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 | |
| 383. |
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 | |
| 384. |
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 | |
| 385. |
Income tax payable come under ------------------ |
| A. | Long term liability |
| B. | Long term fund |
| C. | Current liability |
| D. | Other liabilities |
| Answer» C. Current liability | |
| 386. |
Stock and prepaid expanses are not included in ---------------- |
| A. | Current asset |
| B. | Fixed asset |
| C. | Current liability |
| D. | Quick asset |
| Answer» D. Quick asset | |
| 387. |
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 | |
| 388. |
Cost of good sold+operating expanses=------------------------- |
| A. | Total cost |
| B. | Cost of product |
| C. | Cost of sales |
| D. | Operating cost |
| Answer» D. Operating cost | |
| 389. |
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 | |
| 390. |
Example of leverage ratio |
| A. | Debtors velocity |
| B. | Stock turnover ratio |
| C. | Current ratio |
| D. | Solvency ratio |
| Answer» D. Solvency ratio | |
| 391. |
Current ratio is an example of -------------------- |
| A. | Leverage ratio |
| B. | Liquidity ratio |
| C. | Activity ratio |
| D. | Turnover ratio |
| Answer» B. Liquidity ratio | |
| 392. |
Stock turn over ratio is an example of ------------------- |
| A. | Liquidity ratio |
| B. | Leverage ratio |
| C. | Profitability ratios |
| D. | Activity ratios |
| Answer» D. Activity ratios | |
| 393. |
Ratio analysis is a study of relationship among various --------------- factors in a business |
| A. | Operational |
| B. | Official |
| C. | Financial |
| D. | Others |
| Answer» C. Financial | |
| 394. |
Liquidity ratios measure the --------- solvency of a firm |
| A. | Long term |
| B. | Short term |
| C. | Average |
| D. | Others |
| Answer» B. Short term | |
| 395. |
By computing current ratio ---------------- solvency of a concern is assessed |
| A. | Short term |
| B. | Long term |
| C. | Liquidity |
| D. | Profitability |
| Answer» A. Short term | |
| 396. |
---------------- 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 | |
| 397. |
Satisfactory level of debt equity ratio is -------------------- |
| A. | 1:1 |
| B. | 3:1 |
| C. | 2:1 |
| D. | 1:2 |
| Answer» C. 2:1 | |
| 398. |
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 | |
| 399. |
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 | |
| 400. |
Coverage of fixed assets by shareholder’s equity is a good tests of---------------- |
| A. | solvency |
| B. | liquidity |
| C. | Activity |
| D. | profitability |
| Answer» A. solvency | |
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