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Accountancy MCQ Class 12 Chapter 10

1. The two basic measures of liquidity are _______.
(a) Inventory turnover and current ratio
(b) Current ratio and liquid ratio
(c) Current ratio and average collection period
(d) Current ratio and debtors turnover ratio

2. To know the return on investment, by capital employed we mean:
(a) Net Fixed Assets
(b) Current Asset-Current Liabilities
(c) Gross Block
(d) Fixed Assets + Current Assets-Current Liabilities

3. To test the liquidity of concern, which of the following ratios is useful?
(a) Capital turnover ratio
(b) Acid test ratio
(c) Stock turnover ratio
(d) Net profit ratio

4. The gross profit ratio is the ratio of gross profit to :
(a) Net Cash Sales
(b) Net Credit Sales
(c) Closing Stock
(d) Net Total Sales

5. _______ is also known as a liquid ratio.
(a) Current ratio
(b) Quick ratio
(c) Capital ratio
(d) None of the above

6. Which of the following non-operating expense?
(a) Rent
(b) Selling Expenses
(c) Wages
(d) Loss on Sale of Machinery

7. The formula for finding out the debt-equity ratio is______.
(a) Long-term debts/Shareholders’ funds
(b) Debentures/Equity capital
(c) Net profit/Total capital
(d) None of the above

8. The following groups of ratios primarily measure risk?
(a) Liquidity, activity and profitability
(b) Liquidity, activity and common stock
(c) Liquidity, activity and debt
(d) Activity, debt and profitability

9. Operating Ratio is:
(a) Profitability Ratio
(b) Activity Ratio
(c) Solvency Ratio
(d) None of these

10. Which of the following transactions will improve the current ratio?
(a) Purchase of goods for cash
(b) Cash received from customers
(c) Payment of creditors
(d) Credit purchase of goods

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