Self Studies

Statement Analysis Tools and Accounting Ratios Test - 7

Result Self Studies

Statement Analysis Tools and Accounting Ratios Test - 7
  • Score

    -

    out of -
  • Rank

    -

    out of -
TIME Taken - -
Self Studies

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.

Self Studies Self Studies
Weekly Quiz Competition
  • Question 1
    1 / -0

    From the following, calculate Inventories turnover ratio— Net Revenue from operations –₹2,00,000 Gross Profit = 25% , Opening Inventories = ₹5000, Inventories at the end -₹15000

    Solution

    Inventory Turnover Ratio = 15 Times

    Cost of Revenue from operations = 2,00,000 – (25% of Net Revenue from operations) = 1,50,000

    Average inventory = 5,000 + 15,000 = 20,000/2 = 10,000

    Inventory turnover ratio = 1,50,000/10,000 = 15

  • Question 2
    1 / -0

    Loss on sale of investment is:

    Solution

    The loss on sale of investment do not from part of operating cost. So will be taken in other expenses

  • Question 3
    1 / -0

    Gross Profit Ratio and Net Profit Ratio is calculated under------------

    Solution

    Profitability ratios are used to assess a business's ability to generate earnings compared to its expenses and other relevant costs incurred during a specific period of time.

  • Question 4
    1 / -0

    XYZ Company's total current assets are ₹10,000,000 and its total current liabilities are ₹8,000,000 then its current ratio would be

    Solution

    Current Ratio = 1.25

    i.e. Current Ratio = Current Assets/Current Liabilities

    Current Ratio = 10,000,000/8000000 = 1.25

  • Question 5
    1 / -0

    Operating cost – Operating Expenses = ?

    Solution

    Operating cost is calculated by adding cost of goods sold and operating expenses. Therefore operating cost - operating expenses = cost of revenue from operations

  • Question 6
    1 / -0

    Financial statement analysis is a ___________ of business transactions

    Solution

    Is a process of reviewing and analysing a company's financial statements to make better economic decisions.so it can be termed as a post mortem

  • Question 7
    1 / -0

    Solution

    The operating profit ratio indicates how much profit a company makes after paying for variable costs of production such as wages , raw materials etc. It is expressed as a percentage of sales and shows the efficiency of a company controlling costs and expenses associated with business operations


    Operating ratio is a company's operating expenses as a percentage of revenue.


    Gross profit ratio is used to assess a company's financial health and business model by revealing the proportion of money left over from revenues after accounting for the cost of goods sold

  • Question 8
    1 / -0

    External analysis is concerned with __________

    Solution

    External analysis is done by shrehoders as investors, banks and other financial institutions with the help of published financial reports of the company. 

  • Question 9
    1 / -0

    Bad debts are shown under :

    Solution

    Bad debt expense  represents the amount of uncollectible account receivable that occurs in a given period.

  • Question 10
    1 / -0

    Liquid Ratio is also known as :

    Solution

    This ratio attempts to measure a company's ability to pay off its short term debt obligations. This is done by comparing a company's most liquid assets, those that can be easily converted to cash, with its short term liabilities

  • Question 11
    1 / -0

    Salaries and wages are shown under :

    Solution

    Employee benefit expenses includes various kinds of non wage compensation provided to employees in addition to their normal wages or salaries

  • Question 12
    1 / -0

    An ideal Current Ratio is :

    Solution

    Ideal is 2:1. A high ratio indicates under trading and over capitalisation and vise versa.

  • Question 13
    1 / -0

    While preparing Statement of Profit and Loss , net sales is Recorded as :

    Solution

    Source of income from the main activities of business can be termed as revenue.

  • Question 14
    1 / -0

    Low ?Working Capital Turnover Ratio? indicates:

    Solution

    Indicates that a business is investing in too many accounts receivable and inventory assets to support its sales , which could eventually lead to an excessive amount of bad debts and obsolete inventory.

  • Question 15
    1 / -0

    Quick Ratio of Vinod Limited is 1.5:1. Company pays dividend ₹28,000 to its shareholders. What will be the impact on Quick Ratio?

    Solution

    The Quick Ratio will increase because both quick assets and current liabilities will decrease ie., cash and dividend liability will decrease by that much amount

  • Question 16
    1 / -0

    Which of the following is not a part of Long Term Borrowings?

    Solution

    Borrowings for more than one year validity can be termed as long term borrowings.  Bank overdraft is meant for a short period and therefore will be treated as current liability.

  • Question 17
    1 / -0

    Rent received is shown under

    Solution

    Rent received is not a part of operating income. So will be taking in other incomes

  • Question 18
    1 / -0

    Payment of outstanding liabilities will:

    Solution

    Payment of outstanding liabilities will decrease cash balance and outstanding liabilities balance also. So both current assets and liabilities will decrease

  • Question 19
    1 / -0

    Financial statement analysis is of two types i.e. _________

    Solution

    Shareholders as investors, banks, financial institutions, material suppliers, govt dept  and tax authorities are doing external analysis using published financial statements. While internal analysis is done by the top management with the help of management accountant..

  • Question 20
    1 / -0

    The Current Ratio of Vinod Limited is 2:1. Company purchased a Computer by paying cash for office use. What will be the effect on Ratio?

    Solution

    Cash is paying so current assets will decrease as a result current ratio is also decrease.

  • Question 21
    1 / -0

    Which of the following is not a Quick Asset_______

    Solution

    Assets which can be easily converted into cash can be termed as quick assets. Loose tools having least liquidity


     
  • Question 22
    1 / -0

    Deferred Tax Asset is treated as:

    Solution

    It is an accounting term that refers to a situation where a business has overpaid taxes or taxes paid in advance on its balance sheet. 

  • Question 23
    1 / -0

    Vinod Limited has Liquid Ratio of 2:1. If its inventories are ₹20,000 and its total current liabilities are ₹50,000. What will be the current ratio?

    Solution

    Current Ratio will be 2.4 : 1 (1,20,000/50,000)

    i.e. Liquid Ratio = 2; it means liquid assets 50,000 x 2 = 1,00,000

    Current Assets = 1,00,000 + 20,000 = 1,20,000

  • Question 24
    1 / -0

    Quick Assets do not include:

    Solution

    Quick assets include a company's most liquid assets which can be easily converted into cash. Inventories have less liquidity and therefore not included in quick assets.

  • Question 25
    1 / -0

    Revenue from operations – Cost of Revenue from operations =?

    Solution

    Gross Profit is calculated by deducting cost of revenue from operations from Revenue from operations. i.e  Net sale – Cost of goods sold

Self Studies
User
Question Analysis
  • Correct -

  • Wrong -

  • Skipped -

My Perfomance
  • Score

    -

    out of -
  • Rank

    -

    out of -
Re-Attempt Weekly Quiz Competition
Self Studies Get latest Exam Updates
& Study Material Alerts!
No, Thanks
Self Studies
Click on Allow to receive notifications
Allow Notification
Self Studies
Self Studies Self Studies
To enable notifications follow this 2 steps:
  • First Click on Secure Icon Self Studies
  • Second click on the toggle icon
Allow Notification
Get latest Exam Updates & FREE Study Material Alerts!
Self Studies ×
Open Now