Statement Analysis Tools and Accounting Ratios Test

Result

Statement Analysis Tools and Accounting Ratios Test - 39

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

If a ratio is computed with one variable from income statement and another variable from balance sheet, it is called as ________ ratio.

A
Income statement

B
Balance sheet

C
Composite

D
Liquidity

Solution

If a ratio is computed with one variable from income statement and another variable form balance sheet, it is called as composite ratios. For example Debtors turnover ratio which is the ratio of Credit sales to the average debtors balance, here the figure of sales is a from income statement and debtors figure is from balance sheet.
Question 2
1 / -0

___________ ratio refers to the ratios that are calculated for measuring the efficiency of operation of business based on effective utilization of resources.

A
Liquidity

B
Solvency

C
Activity

D
Profitability

Solution

Activity ratios refers to the ratios that are calculated for measuring the efficiency of operation of business based on effective utilization of resources. For example Asset turnover ratio, Capital turnover ratio etc.
Question 3
1 / -0

Which of the following is correct?

A
Equity + LTL - CL = FA + CA

B
Equity + LTL = FA + CA + CL

C
Equity + LTL = FA + Working Capital

D
None of these
Question 4
1 / -0

For calculation of current ratio which of the following is relevant ?

A
Current assets and Fixed liabilities.

B
Current assets and Current liabilities.

C
Fixed asset and Fixed liabilities.

D
Fixed liabilities and Current liabilities.

Solution

The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its short-term obligations. It compares a firm's current assets to its current liabilities, and is expressed as follows: The current ratio is an indication of a firm's liquidity.
Question 5
1 / -0

Calculate gross profit if rate of gross profit is $$20\%$$ on sales and cost of goods is Rs. $$1,20,000$$.

A
Rs. $$24,000$$

B
Rs. $$30,000$$

C
Rs. $$20,000$$

D
None of these

Solution

If gross profit is $$20\%$$ on sales then it would $$25\%$$ on cost.
So,
Gross profit = Cost of goods sold x Gross profit margin on cost
= $$120000$$ x $$25/100$$
= $$Rs. 30000$$
Question 6
1 / -0

Ratio Analysis can be used to study liquidity, turnover, profitability, etc. of a firm. What does Debt-Equity Ratio help to study?

A
Solvency

B
Liquidity

C
Profitability

D
Turnover

Solution

The debt to equity ratio shows the percentage of company financing that comes from creditors and investors. A higher debt to equity ratio indicates that more creditor financing (bank loans) is used than investor financing (shareholders).
Therefore, A is the correct option.
Question 7
1 / -0

Gross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. The reason for such behaviour could be ___________.

A
Increase in Costs of Goods Sold

B
Increase in Indirect Expense

C
Increase in Dividend

D
Decrease in Sales

Solution

Net profit is calculated by subtracting indirect expenses and adding indirect income to the gross profit. Increase in indirect expenses will lead to decrease in the net profit and have no effect on gross profit. If the net profit decreases, Net profit ratio will also decrease.
Therefore, B is the correct option.
Question 8
1 / -0

A company wishes to earn a $$20\%$$ profit margin on selling price. Which % will achieve the required profit margin on cost?

A
$$33\%$$

B
$$25\%$$

C
$$20\%$$

D
None of these

Solution

Let Cost = $$Rs.100$$ ,Profit margin on Selling Price = $$20\%$$ and Selling price = $$Rs. 125$$
Now Profit = $$125$$ x $$20/100$$
= $$Rs. 25$$
Profit margin on Cost = [Profit/ Cost] x $$100$$
= $$[25/100]$$ x $$100$$
= $$25\%$$
Question 9
1 / -0

If the profit is $$25\%$$ on sales, then what percentage of profit is on cost.

A
$$33\%$$

B
$$20\%$$

C
$$40\%$$

D
$$50\%$$

Solution

Hint :-
Let Sales be Rs.100
Profit is 25% on sales i.e.25
Cost will be 100-25=75
So,
75 * x/100 = 25
75x = 2500
x = 33%
Question 10
1 / -0

If profit is $$25\%$$ at cost price, then the profit on sale price will be ?

A
$$20\%$$

B
$$30\%$$

C
$$33$$ $$1/3\%$$

D
$$40\%$$

Solution

Let us suppose ,cost price be Rs 100.
So, the Selling price = 100 + 25% of 100 = 125
Profit = 25
% of Profit on selling price = (25 * 100)/125 = 20%

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 - 39

Result

Statement Analysis Tools and Accounting Ratios Test - 39

Score

-

Rank

-

SHARING IS CARING

Question 1

Income statement

Balance sheet

Composite

Liquidity

Solution

Question 2

Liquidity

Solvency

Activity

Profitability

Solution

Question 3

Equity + LTL - CL = FA + CA

Equity + LTL = FA + CA + CL

Equity + LTL = FA + Working Capital

None of these

Question 4

Current assets and Fixed liabilities.

Current assets and Current liabilities.

Fixed asset and Fixed liabilities.

Fixed liabilities and Current liabilities.

Solution

Question 5

Rs. $$24,000$$

Rs. $$30,000$$

Rs. $$20,000$$

None of these

Solution

Question 6

Solvency

Liquidity

Profitability

Turnover

Solution

Question 7

Increase in Costs of Goods Sold

Increase in Indirect Expense

Increase in Dividend

Decrease in Sales

Solution

Question 8

$$33\%$$

$$25\%$$

$$20\%$$

None of these

Solution

Question 9

$$33\%$$

$$20\%$$

$$40\%$$

$$50\%$$

Solution

Question 10

$$20\%$$

$$30\%$$

$$33$$ $$1/3\%$$

$$40\%$$

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.