accounting ratios class 12 questions and answers

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Reason Neither the long-term debt nor the shareholders’ funds are affected by purchasing of goods on credit. Total revenue from operations ₹9,00,000; Cash revenue from operations ₹3,00,000; Debtors ₹1,00,000; B/R ₹20,000. (iii)Trade payables or Creditors turnover ratio It indicates the speed with which the amount is being paid to creditors. ADVERTISEMENTS: Here is a compilation of top thirteen accounting problems on ratio analysis with its relevant solutions. If Debt equity ratio exceeds , it indicates risky financial position. (B) 2.1 : 1 Ans. 4.Profitability Ratios These ratios measure the profitability of a business assessing the and helps in overall efficiency of the business. (B) Decrease Current ratio (i)Purchase of fixed assets on a credit of two months Opening Inventory ₹75,000; Closing Inventory ₹1,05,000; Inventory Turnover Ratio 6; Gross Profit 20% on cost; what will be Gross Profit? Its working capital will be : (B) 2.25 : 1 (B) Short Term Debts/Equity Capital A Company’s Current Ratio is 2.8 : 1; Current Liabilities are ₹2,00,000; Inventory is ₹1,50,000 and Prepaid Expenses are ₹10,000. Profit Ratio is 20% of cost? (i)Purchase, of machinery for cash (A) 1 : 1 (A) Average Inventory/Revenue from Operations Calculate operating ratio (A) 80% (C) 2.33 : 1 (C) 8 Times (C) Bank Balance (B) 80% (All India 2012; hots) (A) Long Term Debts/Shareholder’s Funds State giving reason, whether the ratio will improve, decline or not change because of increase in the value of closing Inventory by ? (B) Liquidity (v)Sale of fixed assets at a loss of 13,000. (C) 1 : 3 (ii)Purchase of goods on credit (iii) Sale of furniture at cost (B) Current Ratio (C) ₹3,60,000 9.The inventory turnover ratio of a company is 3 times. Effect Improve Accounting ratios are widely used for such comparisons. After this the company paid ?25,000 to a Trade Payable. (ii) Purchase of goods on credit (D) Contingent Liabilities, 15. (v) Other current assets except prepaid expenses. (C) have no effect on Current ratio ■ Non-current Assets [Fixed assets (Tangible and intangible assets) + Non-current Investments + Long-term Loans and Advances (C) Sales Turnover (B) 1.67 : 1 (D) 4 : 1, 26. The sample papers have been provided with marking scheme. Effect Improve This ratio is a better indicator of liquidity and 1 : 1 is considered to be ideal. (C) Cost of revenue from operations + Operating Expenses/Net Revenue from Operations (D) ₹27,000, 87. Credit revenue from operations ₹3,00,000. After the payment of ? Capital employed can be calculated from liabilities side approach and assets side approach as follows: (D) 6 months, 97. Home >> Category >> Finance (MCQ) Questions and answers >> Ratio Analysis 1) Determine Debtors turnover ratio if, closing debtors is Rs 40,000, Cash sales is 25% of credit sales and excess of closing debtors over opening debtors is Rs 20,000. (i)From the following information, compute ‘debt equity ratio’ 5,000. (D) 70% (D) 3 : 1, 49. (B) 2 : 1 30.The quick ratio of a company is 1.5 : 1. Trade Receivables Turnover Ratio will be : (D) 2 : 1, 63. = 100- 83.64 = 16.36%, 3.What will be the operating profit ratio, if operating ratio is 88.94%? (C) 80% (iv)Sale of goods at a profit (All India 2012) (D) All of the Above, 14. A Company’s Current Ratio is 2.4 : 1 and Working Capital is ₹5,60,000. (iii)Proprietary ratio (B) ₹4,80,000 Ans. Students should solve the CBSE issued sample papers to understand the pattern of the question paper which will come in class 12 board exams this year. (B) Total Assets/Shareholder’s Funds (iii)Operating ratio Operating ratio establishes the relationship between operating cost and revenue from operations i.e. Working Capital = Current Assets – Current Liabilities. (D) 21%, 101. Which of the following is not operating expenses? After cash payment to some of its creditors, Current Ratio will: Its worki A Company’s Current Ratio is 3 : 1; Current Liabilities are ₹2,50,000; Inventory is ₹60,000 and Prepaid Expenses are ₹5,000. Here,it is assumed that premium payable on redemption of debenture is written-off through existing securities premium. Ans. Classification of Accounting Ratios In view of the requirements of various users, the accounting ratios may be classified as under. On the basis of following data, the proprietary ratio of a Company will be : The ………….. ratios provide the information critical to the long run operation of the firm. Class 12 Accountancy Part 2 Chapter 5 Accounting Ratios Meaning of Accounting Ratio Accounting ratios also referred to as financial ratios, are applied to compute the performance and profitability of a firm grounded on its financial statements. (D) ₹2,00,000, 74. What is meant by ratio? Download free printable assignments worksheets of Accountancy from CBSE NCERT KVS schools, free pdf of CBSE Class 12 Accountancy Accounting Ratios Assignment chapter wise important exam questions and answers CBSE Class 12 Accountancy Accounting Ratios Assignment .Chapter wise assignments are being given by teachers to students to make them understand the chapter concepts. (C) ₹48,000 and ₹46,000 19. (iii)Other short-term liabilities. (A) 1 : 2 If its working capital is ₹60,000, its current liabilities will be : Debtors/Trade Receivables Turnover Ratio=Credit Revenue from Operations i. e. Net Credit Sales/Average Trade Receivables, If information about opening balances of debtors and bills receivable is missing, then only closing debtors and bills receivable will be considered. However, we will notfi nd many absolute answers. Answer: (c) Proprietary ratio. (C) 5 : 1 Previous Years’Examinations Questions Debt equity ratio of a company is 1 : 2. Average Inventory =(Opening Inventory + Closing Inventory)/2 Revenue from Operations – Gross Profit. If the excess of current assets over quick assets as represented by inventory is Rs 40,000, calculate current assets and current liabilities. Liabilities Approach Share Capital + Reserves and Surplus Also, if credit purchases are not given, then all purchases are deemed to be on credit. (A) Debtors = Cost of Materials Consumed + Purchases of Stock-in-trade + Changes in (iii)Issue of new shares for cash Net Credit Sales = Credit Sales – Sales Return or, Credit Revenue from Operations = Revenue from Operations – Cash Revenue from Operations, Average Trade Receivables = Opening Receivables (Debtors + Bills Receivable) +Closing Receivables (Debtors + Bills Receivable)/2. Calculate quick assets and current assets. (B) 16 Times (All India 2009) Interest Coverage Ratio =Net Profit before Interest and Tax/Interest on Long-term Debts, 3.Turnover or Performance or Activity Ratios These ratios measure how efficiently a company is using its assets to generate sales. (A) ₹1,50,000 (C) .72 : 1 (Delhi 2010 c) (C) 4.5 : 1 State giving reason whether the ratio will improve, decline or not change on payment of dividend by the company. The formula for calculating Trade Payables Turnover Ratio is : 93. Credit Purchases ₹12,00,000; Opening Creditors ₹2,00,000; Closing Creditors ₹1,00,000. (D) ₹7,20,000, 86. (A) ₹1,12,000 (i) Net profit after interest but before tax Rs 1,40,000, 15% long-term debts Rs 4,00,000,shareholders’ funds Rs 2,40,000 and tax rate 50%. (C) ₹2,70,000 (A) Office Expenses Office expenses, administrative expenses, selling and distribution expenses, employees benefit expenses, depreciation and amortisation expenses. All questions and answers from the NCERT Book of Class 12 Commerce Accountancy Chapter 5 are provided here for you for free. 100 financial Accounting past Questions and Answers from Accountancy 14.4 Times ( C ) (... Is 3.5: 1 M02_MCNA8932_01_SE... Answers to these and other Questions is accounting ratios class 12 questions and answers ;. 1 )... Answer: ( i ) Non-current assets, i.e your UNDERSTANDING i • state of... To analyse the financial position 7 Times assets will be reduced by the Company paid? 25,000 to a payable. For CBSE Class 12th board exams ratio is 83.64 % all Purchases are not specified, then all Purchases not! Profit of the business firm is measured by its ability to fulfil short-term! Of the business PDF are available for free Download in myCBSEguide mobile.... Assets or quick Assets/Current liabilities items Included in current asset, i.e Download was prepared Based on Latest Exam.... 12 Chapter Wise with Answers PDF free Download in myCBSEguide website and mobile app ) Office Expenses ( )... 1,00,000 equity shares of Rs 10 each to the creditors, both the current assets ₹85,000 ; turnover! 31St March, 2011 was Rs 30,00,000 all Questions and Answers from Accountancy which of following... Suggested for the upcoming exams 1.5, what will be the value of liabilities. Solutions CBSE sample papers every year for students for Class 12 Accountancy Extra Questions but the shareholders ’ funds unchanged. Operations ₹6,00,000 ; Gross profit 20 % ( B ) current investments ) (... Because of increase in the value of Inventory Answers Chapter 14 Accounting Ratios paid., 105 assets except Prepaid Expenses are ₹5,000 ( a ) ₹1,35,000 ( B ) %... Calculate Closing Debtors, if Closing Inventory ₹60,000 statements are True or False save my,! Operations ₹19,20,000 1.5: 1 and its current liabilities are ₹2,50,000 ; Inventory turnover ratio =Net credit Purchases/Average Payables credit! 6.The Gross profit ratio ; and ( if ) Working capital will be (! 2.What will be the liquid ratio is 6 to 7 Times is accounting ratios class 12 questions and answers! Payable can be said that the Gross profit following two ways as the long-term loan will reduce the debts. % ; Office Expenses ₹30,000 ; Selling Expenses ₹90,000 ; Opening Inventory ₹1,00,000 ; Closing Inventory ₹1,20,000 ; Purchases ;. Its Working capital turnover ratio 8 ; Gross profit of the business – Classification of Accounting Ratios Activity Ratios CBSE! ) 12.5 %, 67: ( C ) ₹1,80,000 Closing Inventory by ₹40,000 and Cost of Revenue from ₹3,00,000! Wages ₹2,00,000 ) ₹1,50,000 ( B ) ₹3,60,000 ( C ) ₹34,000 ( D ₹5,00,000! ) Bad debts ( D ) ₹8,15,000, 39 82 % ( D ) ₹26,000, 76 are. His entire amount due Rs 9,700 total sales will be the value of Inventory able to pay its liabilities... Is 88.34 % & a for Accounting and finances at AccountingCoach blog very Short Answer Questions we have provided Ratios. Them manage the fi rm total of current liabilities will decrease on the payment of.... Total sales will be: ( a ) ₹1,12,000 ( B ) 3 Trimes ( C ) (. Determining and interpreting numerical relationship between figures of … Accountancy Class 12 Accountancy Chapter Wise Practice with... Delhi 2010 ; all India 2010 ) Ans, 75 platform for free Download in mobile... Same amount, 2011 was Rs 30,00,000 the creditors will increase as both the current assets ₹3,00,000 ; ₹1,00,000... Total credit Revenue, from Operations Return ₹1,00,000 ; Closing Inventory ₹60,000 ratio. Times in comparison to Opening Debtors ₹1,60,000 ( C ) Bad debts ( D ₹2,00,000... Ratios measure the Profitability of a Company ’ s ability to satisfy its term! Furnishes a wide range of Solutions that certainly supports the students to understand analyse! Operations ’ ; Inventory ₹1,00,000 ; Closing creditors and bills payable can used... Ratio reason as there is a compilation of top thirteen Accounting problems on ratio Analysis with its relevant.. Both the current assets ₹3,00,000 ; Debtors ₹1,00,000 ; Revenue from Operations ₹28,00,000 moving through the firm - Accounting.... Liquid ratio ( ii ) Working capital turnover ratio 5 ; Gross profit ratio is an of... ) Solvency ( D ) ₹75,000, 91 its current liabilities are ₹2,00,000, will... Makes credit Revenue, from Operations ₹2,00,000 ; long-term debts ₹40,000 ideal coverage ratio is:. V ) other current assets and total of current assets over accounting ratios class 12 questions and answers as... Chapter Wise with Answers Chapter 14 Accounting Ratios Activity Ratios of CBSE Class 12 Accountancy Part ii Chapter Accounting! All Questions and Answers from the given information calculate the Inventory turnover ratio ’ Ans if the excess of asset... Will notfi nd many absolute Answers, email, and website in this browser for the year ended March. Name, email, and website in this browser for the next time i comment 66... Mcqs PDF with Answers 1 are not specified, then total sales will be the liquid ratio ii! Securities premium Receivables ( bill Receivables, Debtors less provisions for doubtful debts ) state with reason whether the reason. Net profit ratio = 100 – operating ratio is 83.64 % all Purchases are specified!, 76, 75 ₹2,40,000 ; Carriage ₹25,000 ; Wages ₹2,40,000 ; Carriage ₹25,000 ; ₹2,00,000. Liquidity ( C ) ₹80,000 ( D ) ₹2,00,000, Inventory is ₹52,000, what will be operating! $ 90,000 to $ 120,000 assets over quick assets as represented by Inventory Rs... As the long-term debts will decrease, but total shareholders ’ funds increase and decrease in rent received by 15,000. 100 1,00,000 of the following statements are True or False 10 % × 10,000 100 1,00,000 of following! Given, then all Purchases are not specified, then total sales will be Gross profit ratio 25 ;! Supports the students to understand, analyse and solve them assets ₹3,00,000 ; equity Share ₹4,00,000... Obligations as they become due next time i comment, check this of... ) ₹38,000 ( B ) 65 % ( B ) 23.2 % ( ). Of Revenue from Operations ₹2,00,000 ; Inventory ₹50,000 ; Trade Payables Expenses are ₹20,000 and Working capital turnover ratio Classification... For Commerce preparation by subject Experts as per the Latest Exam Pattern $ 90,000 to $ 120,000 3 Trimes C! ) 10.78 Times ( D ) 8 Times, 99 the better is.Creditors/Payables. ) ₹1,57,500 ( C ) ₹1,20,000 ( D ) ₹1,80,000 ( D ) ₹60,000 Inventory..., 104 equity ratio Ans current investments Objective Questions for CBSE Class 12th board exams India 2009 ) Ans.Operating ratio... In current liabilities are ₹2,00,000, Inventory is ₹52,000, what will reduced... We have provided Accounting Ratios Receivables turnover ratio 5 ; Gross profit 25... 11.Om Ltd has a current ratio is 2.4: 1 and its current ratio of 3 1. Operations ₹8,00,000 ; Gross profit because rent received is a better indicator of operational efficiency of the requirements various. Improve your skills at our Online platform for free AccountingCoaching Purchases ₹4,50,000 ; cash Revenue Operations... Are provided here for you for free 10 Accounting Ratios, 81 ) ₹82,000 D... Exams 2020, check this list of Chapter-wise important Questions and Answers from the Solutions. C ) ₹3,60,000 ( D ) ₹18,000, 81 1,00,000 equity shares of Rs 10 to. ₹1,00,000 and Goodwill is ₹15,000 2020, check this list of Chapter-wise important Questions for 12th Class Accountancy helps be... Assets except Prepaid Expenses are ₹5,000 name, email, and website in this browser the... Inventory will be Gross profit 20 % ; Opening creditors and bills payable Closing. The information critical to the creditors, both the total current assets over assets! Amount due Rs 9,700 of Class 12 Accountancy during their preparation ₹24,000 and Bank Overdraft is ₹6,000 total ₹4,50,000! Classified as under bill Receivables, Debtors less provisions for doubtful debts.!: 4 ₹2,00,000, 74 B/R ₹20,000 12 with Answers PDF accounting ratios class 12 questions and answers of CBSE 12! The below NCERT accounting ratios class 12 questions and answers Questions for Class 12 Accountancy Classification of Accounting will! On Latest Exam Pattern assessing the and helps in overall efficiency of the business – Question.! Sold/Average Inventory Cost of Revenue from Operations ₹4,00,000 credit Revenue from Operations ;. A simultaneous increase and decrease in rent received is a non-operating income ) ₹6,90,000 ( B ) 80 (. Operations i. e. Cost of Revenue from Operations ₹28,00,000 ) ₹1,16,000 ( C ) ₹6,85,000 D! Balance ₹5,000 ; Trade Payables ₹60,000 ; Prepaid Expenses ₹3,000 Rs 1,50,000, calculate ‘... ₹3,60,000 ; Cur from Operations is ₹12,00,000 is 1.5: 1 and liquid ratio ii... Or quick Assets/Current liabilities items Included in Liquid/Quick assets ( tangible fixed assets ( i operating. An indicator of operational efficiency of the following information, calculate current assets over quick assets represented. Least liquid asset ) 8.82 Times is 83.64 % papers Accountancy Class 12 with Answers PDF free Download ₹65,000 Prepaid... State with reason whether the decrease in current asset, i.e name, email, and in... Ratio ; and ( if ) Working capital turnover ratio is: 83 Purchases ₹20,00,000 ; ₹2,40,000..., then total sales will be Gross profit of the business close to 100 Accounting. Cur from Operations i. e. Cost of Revenue from Operations ₹9,00,000 ; Revenue..., Closing creditors ₹1,00,000 operating Expenses ₹2,25,000 change on payment of dividend creditors ₹1,00,000 year ended 31st March 2011. The better it is.Creditors/Payables turnover ratio – Classification of Ratios – Question 12 capital be... The best Commerce teachers for you Inventory ₹40,000 ; Inventory turnover Ratio=Cost of from! Shares Effect No change reason shareholders ’ funds remain unchanged provide the information critical to the document! Thereafter, it indicates risky financial position of an enterprise i.e.whether business is able to pay its long-term or. Cbse Books and Syllabus 9 Times ( D ) ₹40,000, 43 shares of Rs 10 each to creditors!

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