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Test: Accounting Ratios- Case Based Type Questions - Commerce MCQ


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12 Questions MCQ Test Online MCQ Tests for Commerce - Test: Accounting Ratios- Case Based Type Questions

Test: Accounting Ratios- Case Based Type Questions for Commerce 2024 is part of Online MCQ Tests for Commerce preparation. The Test: Accounting Ratios- Case Based Type Questions questions and answers have been prepared according to the Commerce exam syllabus.The Test: Accounting Ratios- Case Based Type Questions MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Accounting Ratios- Case Based Type Questions below.
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Test: Accounting Ratios- Case Based Type Questions - Question 1

Read the following hypothetical extract of ABC Ltd. and answer the questions that follow: The following information are given:

Trade Receivables Turnover Ratio 4 times

Current Liabilities ₹ 5,000

Average Debtors ₹ 1,80,000

Working Capital Turnover Ratio 8 times

Cash Revenue from Operations 25% of Revenue from Operations

Gross Profit Ratio

What will be the value of current assets?

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 1
Working Capital = Current Assets – Current Liabilities

Current Assets = Working Capital + Current Liabilities

= ₹1,20,000 + ₹5,000

= ₹1,25,000

Test: Accounting Ratios- Case Based Type Questions - Question 2

Read the following hypothetical extract of ABC Ltd. and answer the questions that follow: The following information are given:

Trade Receivables Turnover Ratio 4 times

Current Liabilities ₹ 5,000

Average Debtors ₹ 1,80,000

Working Capital Turnover Ratio 8 times

Cash Revenue from Operations 25% of Revenue from Operations

Gross Profit Ratio

What is the revenue from operations?

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 2
Trade Receivables Turnover ratio

= Credit Revenue from Operations / Average Trade Receivables

4 = Credit Revenue from Operations / 1,80,000

Credit Revenue from Operations = ₹1,80,000 × 4 = ₹ 7,20,000

Credit Revenue from Operations = 75% of Revenue from Operations

₹7,20,000 = 75% of Revenue from Operations Revenue from Operations = ₹9,60,000

Test: Accounting Ratios- Case Based Type Questions - Question 3

Read the following hypothetical extract of ABC Ltd. and answer the questions that follow: The following information are given:

Trade Receivables Turnover Ratio 4 times

Current Liabilities ₹ 5,000

Average Debtors ₹ 1,80,000

Working Capital Turnover Ratio 8 times

Cash Revenue from Operations 25% of Revenue from Operations

Gross Profit Ratio

What is the working Capital?

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 3
Working Capital Turnover Ratio

= Revenue from Operations / Working Capital

8 = 9,60,000 /Working Capital

Working Capital = 9,60,000 / 8 = ₹ 1,20,000

Test: Accounting Ratios- Case Based Type Questions - Question 4

Read the following hypothetical extract of ABC Ltd. and answer the questions that follow: The following information are given:

Trade Receivables Turnover Ratio 4 times

Current Liabilities ₹ 5,000

Average Debtors ₹ 1,80,000

Working Capital Turnover Ratio 8 times

Cash Revenue from Operations 25% of Revenue from Operations

Gross Profit Ratio

What is the Gross Profit?

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 4
Gross Profit = Gross Profit Ratio × Revenue from Operations

= of ₹9,60,000 = ₹3,20,000

Test: Accounting Ratios- Case Based Type Questions - Question 5

Consider the following data and answer the questions that follow:

What is the working capital turnover ratio?

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 5
Working Capital Turnover Ratio = Revenue from Operations / Working Capital

= ₹12,00,000 / ₹1,45,000 = 8.28 times

Test: Accounting Ratios- Case Based Type Questions - Question 6

Consider the following data and answer the questions that follow:

What is the Operating ratio?

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 6
Operating Ratio Cost of Revenue from Operations + Operating Expenses / Revenue from Operations x 100

= ₹9,00,000+ ₹15,000 / ₹12,00,000 x 100

= 76.25%

Test: Accounting Ratios- Case Based Type Questions - Question 7

Consider the following data and answer the questions that follow:

What is the Debt to Equity Ratio?

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 7

Debt to equity Ratio = Total Debt / Shareholders' Fund

= ₹2,50,000 / ₹4,00,000 = 0.63:1

Test: Accounting Ratios- Case Based Type Questions - Question 8

Consider the following data and answer the questions that follow:

What is the quick ratio?

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 8
Quick Ratio = Liquid Assets / Current Liabilities

= ₹2,00,000 / ₹ 75,000 = 2.67 : 1

Test: Accounting Ratios- Case Based Type Questions - Question 9

Read the following information and answer the given questions:

Cost of Revenue from Operations for the year 2020 would be ______________.

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 9
Cost of Revenue from Operations for the year 2020 would be ₹21,12,000.
Test: Accounting Ratios- Case Based Type Questions - Question 10

Read the following information and answer the given questions:

Current Ratio for the year 2020 will be_____. (Choose the correct alternative)

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 10
Current Assets = Prepaid Expenses + Inventory + Trade Receivables + Cash in Hand = ₹3,00,000 + ₹12,00,000 + ₹11,00,000 +₹17,00,000

= ₹43,00,000

Current Liabilities = Outstanding Expenses + Trade Payables

= ₹50,000 + ₹18,00,000

= ₹18,50,000

Current Ratio= Current Assets / Current Liabilities

= ₹43,00,000 / ₹18,50,000 = 2.32 : 1

Test: Accounting Ratios- Case Based Type Questions - Question 11

Read the following information and answer the given questions:

Inventory turnover ratio for the year 2020 will be______.(Choose the correct alternative)

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 11

Inventory Turnover Ratio = Cost of revenue from operations / Average Inventory

= ₹24,00,0000 - ₹2,88,000 / ₹11,00,000 = 1.92 times

Gross Profit Ratio = Gross Profit / Revenue from Operations

Gross Profit = 12% of ₹24,00,000 = ₹2,88,000

Test: Accounting Ratios- Case Based Type Questions - Question 12

Read the following information and answer the given questions:

Quick Ratio for the year 2018 will be_____________. (Choose the correct alternative)

Detailed Solution for Test: Accounting Ratios- Case Based Type Questions - Question 12
Quick Assets = Trade receivables + Cash in hand

= ₹ 10,00,000 + ₹ 15,00,000

= ₹ 25,00,000

Current Liabilities = Outstanding Expenses + Trade Payables

= ₹25,000 + ₹14,00,000

= ₹ 14,25,000

Current Ratio= Current Assets / Current Liabilities

= ₹10,00,000 + ₹15,00,000 / ₹14,25,000 = 1.75 : 1

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