Scribd
Upload
188 views3 pages

Accounting Ratios MCQs 2024

All the MCQs you need for the chapter Acccounting Ratios

Uploaded by

Sanjana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
188 views3 pages

Accounting Ratios MCQs 2024

All the MCQs you need for the chapter Acccounting Ratios

Uploaded by

Sanjana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Accounting Ratios MCQs 2024

Accounting Ratios MCQs


Multiple Choice Questions and Answers

A. Choose the Correct Answer:


1. Working Capital is the ______.

A) Capital borrowed from the Banks.

B) Difference between Current Assets and Current Liabilities.

C) Difference between Current Assets and Fixed Assets.

D) Cash and Bank Balance.

Answer B) Difference between Current Assets and Current Liabilities.

2. Liquid Ratio is equal to liquid assets divided by ______.

A) Current Liabilities.

B) Total Liabilities.

C) Contingent Liabilities.

D) Non-Current Liabilities.

Answer A) Current Liabilities.

3. Which of the following transactions will improve the Current Ratio?

A) Purchase of Goods for Cash.

B) Payment to Trade Payables.

C) Credit purchase of Goods.

D) Cash collected from Trade Receivables.

Answer B) Payment to Trade Payables.


4. The ______ is a measure of liquidity that excludes generally the least liquid asset.

A) Liquid ratio, Accounts receivable.

B) Current ratio, inventory.

C) Liquid ratio, inventory.

D) Current ratio, Accounts receivable.

Answer C) Liquid ratio, inventory.

5. Two basic measures of liquidity are _____.

A) Current ratio and Quick ratio.

B) Gross Profit ratio and Operating ratio.

C) Current ratio and Average collection period.

D) Inventory turnover and Current ratio.

Answer A) Current ratio and Quick ratio.

6. The ________ of a business firm is measured by its ability to satisfy its short-term
obligations as they become due.

A) Liquidity

B) Debt

C) Profitability

D) Activity

Answer A) Liquidity

7. Inventory ratio is a relationship between ______.

A) Cost of goods purchased and cost of average inventory.

B) Cost of goods sold and cost of average inventory, and cost of goods purchased and cost of
average inventory.

C) Cost of goods sold and cost of average inventory.


D) None of the options is correct.

Answer C) Cost of goods sold and cost of average inventory.

8. Debt to equity ratio establishes the relationship between ______.

A) Long-term debt (external equities) and current assets (internal equities).

B) Long-term debt (external equities) and equity (internal equities), and long-term debt
(external equities) and current assets (internal equities).

c) Long-term debt (external equities) and equity (internal equities).

D) None of the options are correct.

Answer C) Long-term debt (external equities) and equity (internal equities).

9. Operating ratio is ______.

A) Cost of the production + Operating expenses / Net revenue from operations.

B) Cost of revenue from operation + Operating expenses / Net revenue from operations.

C) Cost of production / Net revenue from operations.

D) Cost of revenue from operations + Selling expenses / Net revenue from operations.

Answer B) Cost of revenue from operation + Operating expenses / Net revenue from
operations.

10. Equity or Shareholders fund is equal to _____.

A) Equity share capital + Preference share capital.

B) Equity share capital + Revenues and Surplus.

C) Equity share capital + Preference share capital + Revenues and Surplus.

D) None of the options are correct.

Answer C) Equity share capital + Preference share capital + Revenues and Surplus.

You might also like