1. ………………………Accounting is concerned with measurement of the
cost and value of people for the organization.
Correct : D. human resource accounting
2. The important objective of …………………..accounting is to organize the
accumulated financial data into meaningful information.
Correct : A. financial accounting
3. ……………………..accounting is the adoption and analysis of accounting
information and its diagnosis and explanation in such a way so as to assist the
decision -makers.
Correct : B. management accounting
4. Planning is that function of ……………………..which requires an efficient system
of decision – making.
Correct : B. management
5. …………………..costs are pre-determined targets adainst which actual results
are evaluated.
Correct : B. standard
6. Financial Accounting data is primarily meant for …………………
Correct : A. external users
7. Cost Accountant should report to the ……………management.
Correct : A. top
8. The transaction which increase working capital are ………….. of funds
10. Stock is considered as a liquid asset as anytime it can be converted into cash
immediately.
Correct : B. no
11. . Return on properties funds is also known as.
Correct : D. all the above
12. What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold
is Rs 2,00,000 & sales return is Rs10,000 ?
Correct : D. 20%
13. Which of the following is not included in current assets.
Correct : B. stock
14. Liquidity ratios are expressed in
Correct : A. pure ratio form
15. Working capital turnover ratio can be determined by :
Correct : A. ( gross profit / working capital )
16. Determine Working capital turnover ratio if, Current asset is Rs 1,50,000,
current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000.
Correct : B. 6 times
17. The ratio analysis is helpful to management in taking several decisions, but as
a mechanical substitute for judgement and thinking, it is worse than useless.
Correct : A. true
18. Profit for the objective of calculating a ratio may be taken as
Correct : D. all the above
19. If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is
Correct : A. 24%
20. General profitability ratios are based on
Correct : B. sales
21. The ratios which reveal the final result of the managerial policies and
performance is .
Correct : B. profitability ratios.
22. Return on investment is a .
Correct : C. profitability ratios.
23. Net profit ratio is a .
Correct : D. profitability ratio.
24. Stock turnover ratio is a .
Correct : A. turnover ratio.
25. Current ratio is a
Correct : A. short-term solvency ratio.
26. Proprietary ratio is a .
Correct : B. long-term solvency ratio.
27. Fixed assets ratio is a
Correct : B. long-term solvency ratio.
28. Fixed assets turnover ratio is a
Correct : D. turnover ratio.
29. The ratio which measures the profit in relation to capital employed is known as
Correct : A. return on investment.
30. The ratio which determines the profitability from the shareholder’s point of
view is .
Correct : C. return on shareholders funds.
31. Return on equity is also called
Correct : D. return on net worth.
32. Preliminary expenses is an example of
Correct : C. fictitious assets.
33. Prepaid expenses is an example of .
Correct : B. current assets.
34. The ratio which is calculated to measure the productivity of total assets is
Correct : C. return on total assets.
35. The ratio which shows the proportion of profits retained in the business out of
the current year’s profits is
Correct : A. retained earnings ratio.
36. The ratio which indicates earnings per share reflected by the market price is .
Correct : D. price earnings ratio.
37. The ratio establishes the relationship between profit before interest and tax
and fixed interest charges is .
Correct : A. interest cover ratio.
38. The ratio shows the preference dividend as a proportion of profit available for
shareholders is
Correct : B. fixed dividend cover ratio.
39. The dividend is related to the market value of shares in .
Correct : D. dividend yield ratio.
40. Turnover ratio is also known as .
Correct : A. activity ratios.
41. Inventory or stock turnover ratio is also called .
Correct : A. stock velocity ratio.
42. Which ratio is calculated to ascertain the efficiency of inventory management
in terms of capital investment?
Correct : A. stock velocity ratio.
43. The ratio which measures the relationship between the cost of goods sold and
the amount of average inventory is
48. Which of the following shows details and results of the company's profitrelated activities for a period of time?
Correct : B. income statement
49. Which of the following financial statements is also known as a statement of
financial position?
Correct : A. balance sheet
50. A firm has Capital of Rs. 10,00,000; Sales of Rs. 5,00,000; Gross Profit of Rs.
2,00,000 and Expenses of Rs.1,00,000. What is the Net Profit Ratio?
Correct : A. 20%,
51. Which technique used for figures of two or more periods are placed side by
side to facilitate easy and meaningful comparisons?
Correct : A. comparative statement
52. Which of the following are techniques, tools or methods of analysis and
interpretation of financial statements?
Correct : D. all of the above
53. Which of the following is NOT a key ratio in the prediction of bankruptcy as
developed by Edward Altman?
Correct : A. debt to equity
54. _______________ ratios measure the ability of a firm to earn an adequate
return on sales, total assets and invested capital.
Correct : C. profitability
55. The ________ ratios help determines the degree of financial risk and earnings
volatility present in a firm.
Correct : C. liquidity
56. __________ analysis is the process of studying a series of ratios for a company
and/or industry over time.
Correct : C. common size
57. The ideal level of current ratio is
Correct : B. 2:1
58. The most precise test of liquidity is
Correct : C. absolute liquid ratio
59. Debt-equity ratio is a sub-part of
Correct : A. short-term solvency ratio
60. Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are Rs 60,000.
Determine value of stock.
Correct : C. rs 1, 62,000
61. Funds flow statements are prepared so as to
Correct : D. all of the above
62. Net Profit ratio is calculated by
Correct : C. (net profit/net sales) *100
63. If sales is Rs 5, 00,000 and net profit is Rs 1, 20,000 Net Profit ratio is
Correct : A. 24%
64. Operating ratio is calculated by
Correct : A. (operating cost/gross sales) *100
65. The financial decision making that relates to current assets or short term asset is known as
__________________.
Correct : A. working capital
66. In what order should current assets be present on a statement of financial position?
Correct : D. inventories, trade receivables, bank, cash
67. If value of opening inventories increases, what happens to the value of gross profit?
Correct : A. decreases
68. What does the statement of comprehensive income show?
Correct : C. the profit or loss made by a business over a period of time
69. Depreciation is applied to non-current assets in the statement of financial position in order to
Correct : B. show a true and fair value of the non-current assets
70. What would be the most likely impact on trade receivables days if invoice discounting was
offered to and accepted by a large customer of a business?
Correct : B. trade receivables days would reduce
71. ___________in accounting, is when the costs to acquire an asset are expensed over the life of
that asset rather than in the period it was incurred?
Correct : B. capitalization.
72. Capitalization is the sum of a corporation’s stock, long term debts &________?
Correct : B. retained earnings
73. __________ is a situation in which actual profits of a company are not sufficient enough to
pay interest on debentures, on loans and pay dividends on shares over a period of time?
Correct : B. over capitalization
74. Asset structure = _________+__________.
Correct : C. fixed asset+current asset
75. In finance, "working capital" means the same thing as __________.
Correct : C. current assets.
76. In deciding the appropriate level of current assets for the firm, management is confronted
with
_____________.
Correct : A. a trade-off between profitability and risk.
77. Permanent working capital ___________.
Correct : C. is the amount of current assets required to meet a firm\s long-term minimum needs.
78. Net working capital refers to ___________.
Correct : B. current assets minus current liabilities.
79. To financial analysts, "gross working capital" means the same thing as ________.
Correct : B. current assets.
80. An example of fixed asset is________.
Correct : A. live stock.
81. Which one of the following is not the determinant of the working capital?
Correct : D. competitors
82. Permanent working capital ___
Correct : C. fixed at all times
83. Which one of the following is not a method to find working capital requirement?
Correct : D. physical method
84. The Capital used for meeting routine and repetitive expenses of day to day business
operations is called____.
Correct : B. working capital
85. Gross working capital represents __________.
Correct : C. total current assets
86. Net working capital is the excess of current assets over ________.
Correct : A. current liabilities
87. A positive (net) working capital will arise when current assets exceed _________.
Correct : D. current liabilities
88. The net working capital, being the difference between current assets and current liabilities is
a _______.
Correct : C. qualitative concept
89. The Funds required by way of permanent working capital should be provided by
__________.
Correct : D. proprietors
90. Service and Financial concerns may have _____.
Correct : B. shortest operating cycle
91. _____ is that minimum amount which should always be present in the business to carry out
the activities without a break.
Correct : C. permanent working capital
92. Working capital over and above the fixed working capital would be termed as _______.
Correct : A. temporary working capital
93. __________ denotes a situation of too much or excessive working capital.
Correct : B. redundant working capital
94. _________ being the life blood of a business requires to be maintained in reasonably
adequate quantity to run business successfully.
Correct : A. working capital
95. According to ________ working capital refers to the company’s total investment in current
assets.
Correct : B. gross concept
96. According to ________ working capital refers to the difference between current assets and
current liabilities.
Correct : C. net concept
97. The funds required for running an organisation are generally called as ____________.
Correct : C. working capital
98. The __________ is required to ensure circulation of operating cycle.
Correct : A. regular working capital
99. ________ is the excess amount over the requirement for regular working capital.
Correct : C. reserve working capital
100. The working capital required to meet the seasonal need of the business is called _______.