Corporate Accounting Set 4
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This set of Corporate Accounting Multiple Choice Questions & Answers (MCQs) focuses on Corporate Accounting Set 4
Q1 | The ratio which shows the relationship b/w shareholder’s fund and total assets
- debit equity ratio
- proprietary ratio
- solvency ratio
- fixed asset
Q2 | Long term solvency of a firm can be measured by
- current ratio
- net profit ratio
- gross profit ratio
- debt equity ratio
Q3 | The ratio that shows the relationship between fixed asset to shareholders fund
- fixed asset to net worth
- fixed asset ratio
- fixed assets turnover ratio
- net worth ratio
Q4 | The index of efficiency and profitability of the business
- operating ratio
- operating profit ratio
- expense ratio
- net profit ratio
Q5 | The ratio that includes whether investment in inventory is efficiently used or not
- inventory turnover ratio
- working capital turnover ratio
- fixed asset turnover ratio
- activity ratio
Q6 | The main aim of the ratio analysis is to help the ______ of the firm
- owners
- officials
- departments
- management
Q7 | Ratios indicate trends in important items and this helps in _________
- forecasting
- reporting
- analyzing
- interpreting
Q8 | Ratios help the management in evolving market strategies through ________
- inter firm comparison
- intra firm comparison
- ratios
- none of the above
Q9 | Ratios may be used as a measure of ________
- efficiency
- solvency
- profitability
- none of the above
Q10 | An example of Balance Sheet ratio is _______
- net profit ratio
- inventory turnover ratio
- current ratio
- fixed asset turnover ratio
Q11 | Income statement ratios are also called
- operating ratio
- liquidity ratio
- activity ratio
- trend ratio
Q12 | Leverage ratios are also known as _______ ratios
- short term solvency ratios
- long term solvency ratios
- solvency ratio
- liquidity ratio
Q13 | The ratios that shows the capacity of the business unit to meet its short term obligation out ofits short term resources is known as ______
- solvency ratio
- leverage ratio
- liquidity ratio
- trend ratio
Q14 | The ratio that highlight the end result of business activities are known as ________ ratios
- liquidity
- leverage
- activity
- profitability
Q15 | The ideal current ratio is
- 2:1
- 1:1
- 1:2
- 1:3
Q16 | In a sound business, acid test ratio ________ is considered satisfactory
- 1:2
- 2:1
- 1:1
- 0.5:1
Q17 | Satisfactory level of debt equity ratio is _________.
- 1:1
- 3:1
- 2:1
- 1:2
Q18 | The ratio which indicates how quickly debtors are converted into cash is ________.
- receivable turnover ratio
- inventory turnover ratio
- working capital turnover ratio
- creditors turnover ratio
Q19 | Net capital employed is equal to ______.
- total assets minus liabilities
- fixed asset plus net working capital
- total asset minus long-term liabilities
- total assets
Q20 | Lower stock turnover ratio indicates ________.
- solvency position
- monopoly situation
- over investment in inventory
- none of these
Q21 | Market price per share divided by earnings per share is ________.
- price earning ratio
- return on equity
- market test ratio
- book value per share
Q22 | When all debentures are redeemed, balance in the Debenture Redemption Fund Account istransferred to:
- capital reserve
- general reserve
- profit & loss appropriation a/c
- none of these
Q23 | According to SEBI guidelines, a Company will have to create debenture redemption reserveequivalent to the amount of the following percentage of debenture issued:
- 50%
- 25%
- 70%
- 100%
Q24 | Premium on redemption of debentures is a
- personal a/c
- real a/c
- nominal a/c
- suspense a/c
Q25 | Debentures cannot be redeemed at
- par
- premium
- discount
- more than 10% premium