Commerce  >  Accountancy Class 12  >  Test: Accounting Ratios- Assertion & Reason Type Questions Download as PDF

Test: Accounting Ratios- Assertion & Reason Type Questions


Test Description

4 Questions MCQ Test Accountancy Class 12 | Test: Accounting Ratios- Assertion & Reason Type Questions

Test: Accounting Ratios- Assertion & Reason Type Questions for Commerce 2023 is part of Accountancy Class 12 preparation. The Test: Accounting Ratios- Assertion & Reason Type Questions questions and answers have been prepared according to the Commerce exam syllabus.The Test: Accounting Ratios- Assertion & Reason Type Questions MCQs are made for Commerce 2023 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Accounting Ratios- Assertion & Reason Type Questions below.
Solutions of Test: Accounting Ratios- Assertion & Reason Type Questions questions in English are available as part of our Accountancy Class 12 for Commerce & Test: Accounting Ratios- Assertion & Reason Type Questions solutions in Hindi for Accountancy Class 12 course. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free. Attempt Test: Accounting Ratios- Assertion & Reason Type Questions | 4 questions in 8 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Accountancy Class 12 for Commerce Exam | Download free PDF with solutions
1 Crore+ students have signed up on EduRev. Have you?
Test: Accounting Ratios- Assertion & Reason Type Questions - Question 1

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Higher the Gross Profit ratio, good for the business, lower ratio not good for the business.

Reason (R): It reflects the efficiency with which a firm produces its products. A high gross profit ratio indicates that the organization is able to produce at a relatively lower cost.

Detailed Solution for Test: Accounting Ratios- Assertion & Reason Type Questions - Question 1 The gross profit should be sufficient to cover all operating expenses and to build up reserves after paying all fixed interest charges and dividends.
Test: Accounting Ratios- Assertion & Reason Type Questions - Question 2

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Debt to Equity Ratio of 2 : 1 is considered satisfactory. Generally a Low Ratio is considered favourable.

Reason (R): This ratio indicates the proportionate claims of owners and outsiders on a firm's assets. High Ratio shows claims of outsiders are greater but Low Ratio shows outsiders claims are less.

Detailed Solution for Test: Accounting Ratios- Assertion & Reason Type Questions - Question 2 Debt equity ratio is calculated as Total outside liabilities/ Shareholders equity and so it can be said that it is the relationship between outsiders fund and shareholders funds.
Test: Accounting Ratios- Assertion & Reason Type Questions - Question 3

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The standard ratio of current ratio is 2:1.

Reason (R): A high operating ratio leaves a high margin to meet non-operating expenses.

Detailed Solution for Test: Accounting Ratios- Assertion & Reason Type Questions - Question 3 Operating Ratio = (Operating Expenses / Net Sales) * 100. The operating ratio is used to measure the operational efficiency of the management.
Test: Accounting Ratios- Assertion & Reason Type Questions - Question 4

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Liquid ratio reveals strength of liquidity of a business unit.

Reason (R): Liquid ratio is the one of the various ratios used to measure the ability of a company to meet its long-term debts.

Detailed Solution for Test: Accounting Ratios- Assertion & Reason Type Questions - Question 4 Liquid ratio analyses liquid assets and liquid liabilities of a business unit in order to assess the extent of liquidity.
56 videos|89 docs|68 tests
Use Code STAYHOME200 and get INR 200 additional OFF
Use Coupon Code
Information about Test: Accounting Ratios- Assertion & Reason Type Questions Page
In this test you can find the Exam questions for Test: Accounting Ratios- Assertion & Reason Type Questions solved & explained in the simplest way possible. Besides giving Questions and answers for Test: Accounting Ratios- Assertion & Reason Type Questions, EduRev gives you an ample number of Online tests for practice