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. 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