Statement Analysis Tools and Accounting Ratios Test

Result

Statement Analysis Tools and Accounting Ratios Test - 21

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

Total leverage is a combination of

A
Various costs

B
Financial leverage and EPS

C
Operating leverage and EPS

D
Financial leverage and operating leverage
Question 2
1 / -0

A high stock turnover ratio is the ratio does not mean that the company is _________________.

A
buying in small lots

B
efficient and sells quickly

C
buying in big lots and sells slowly

D
None of the above
Question 3
1 / -0

When the concept of ratio is defined in respected to the items shown in the financial statements, it is termed as _______________.

A
Accounting ratio

B
Financial ratio

C
Costing ratio

D
None of the above

Solution

An accounting ratio compares two aspects of a financial statement, such as the relationship of current assets to current liabilities. The ratio can be used to evaluate the financial condition of a company, including the company's strength and weaknesses. Financial ratio evaluates company's operating and financial performance such as liquidity, profitability and solvency. Costing ratio evaluates the change with the level of production to the amount of revenues generated by production.
Question 4
1 / -0

When opening stock is Rs.$$50,000$$ closing stock Rs.$$60,000$$ and cost of goods sold Rs.$$2,20,000$$ the stock turnover ratio is _________.

A
$$2$$ times

B
$$3$$ times

C
$$4$$ times

D
$$5$$ times
Question 5
1 / -0

The most important test of long-term solvency of a business is _______________.

A
$$\frac{Net Profit}{Sales}$$

B
$$\frac{Total assets}{total outside liabilities}$$

C
$$\frac{Debt}{Equity}$$

D
None of the above
Question 6
1 / -0

Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are Rs. 60,000. Determine value of stock.

A
Rs. 54,000

B
Rs. 60,000

C
Rs. 1,62,000

D
None of the above

Solution

QA = Quick assets; CL = Current liabilities; CA = Current assets
QA = 1.8 x CL
QA = 1.8 x Rs. 60,000
QA = Rs. 1,08,000
CA = 2.7 x CA
CA = 2.7 x Rs. 60,000
CA = Rs. 1,62,000
Stock = CA - QA
Stock = Rs. 1,62,000 - Rs. 1,08,000
Stock = Rs. 54,000
Hence, the value of stock is Rs. 54,000.
Question 7
1 / -0

Which of the following approaches attempts to handle the problem of risk and uncertainty in a project?

A
Risk adjusted discount rate

B
Certainty equivalent approach

C
Decision tree

D
All of the above
Question 8
1 / -0

The most precise test of liquidity is ______________.

A
Quick ratio

B
Current ratio

C
Absolute liquid ratio

D
None of the above

Solution

The most precise test of liquidity is "absolute liquid ratio". The ideal absolute liquidity ratio is 1:2. If the ratio is 1:2 or more than this the concern can be considered as liquid. This ratio establishes a relationship between absolute liquid assets and quick liabilities.
Question 9
1 / -0

Financial leverage can be measured in

A
Stock term

B
Flow term

C
Both (A) and (B)

D
None of the above

Solution

Working capital = Current assets - Current liabilities
If the Current assets gets increased, working capital will also be increased and if the Current assets gets decreased, working capital will be decreased.
If the Current liabilities gets decreased, Working capital will be increased and if the current liabilities gets increased, working capital will be decreased.
Therefore, B is the correct option.
Question 10
1 / -0

Ratio analysis is indispensable part of interpretation of result revealed by the _______________.

A
Government statement

B
Accounting statement

C
Financial statement

D
None of the above.

Solution

Ratio analysis is the process of determining and interpreting numerical relationship based on financial statements. It is the technique of interpretation of financial statements with the help of accounting ratios derived from balance sheet and profit and loss account hence, it is indispensable part of interpretation of result reveled by financial statement.

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Statement Analysis Tools and Accounting Ratios Test - 21

Result

Statement Analysis Tools and Accounting Ratios Test - 21

Score

-

Rank

-

SHARING IS CARING

Question 1

Various costs

Financial leverage and EPS

Operating leverage and EPS

Financial leverage and operating leverage

Question 2

buying in small lots

efficient and sells quickly

buying in big lots and sells slowly

None of the above

Question 3

Accounting ratio

Financial ratio

Costing ratio

None of the above

Solution

Question 4

$$2$$ times

$$3$$ times

$$4$$ times

$$5$$ times

Question 5

$$\frac{Net Profit}{Sales}$$

$$\frac{Total assets}{total outside liabilities}$$

$$\frac{Debt}{Equity}$$

None of the above

Question 6

Rs. 54,000

Rs. 60,000

Rs. 1,62,000

None of the above

Solution

Question 7

Risk adjusted discount rate

Certainty equivalent approach

Decision tree

All of the above

Question 8

Quick ratio

Current ratio

Absolute liquid ratio

None of the above

Solution

Question 9

Stock term

Flow term

Both (A) and (B)

None of the above

Solution

Question 10

Government statement

Accounting statement

Financial statement

None of the above.

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.