### Management Accounting Set 2

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This set of Management Accounting Multiple Choice Questions & Answers (MCQs) focuses on Management Accounting Set 2

Q1 | Liquidity ratios are expressed in

- pure ratio form
- percentage
- rate or time
- none of the above

Q2 | Working capital turnover ratio can be determined by :

- ( gross profit / working capital )
- ( cost of goods sold / net sales )
- ( cost of goods sold / working capital)
- none of the above

Q3 | 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.

- 5 times
- 6 times
- 3 times
- 1.5 times

Q4 | The ratio analysis is helpful to management in taking several decisions, but asa mechanical substitute for judgement and thinking, it is worse than useless.

- TRUE
- FALSE
- may be false
- both a and b

Q5 | Profit for the objective of calculating a ratio may be taken as

- profit before tax but after interest
- profit before interest &tax
- profit after interest & tax
- all the above

Q6 | If sales is Rs 5,00,000 & net profit is Rs 1,20,000 Net profit ratio is

- 24%
- 416%
- 60%
- none of the above

Q7 | General profitability ratios are based on

- investment
- sales
- a & b
- none of the above

Q8 | The ratios which reveal the final result of the managerial policies andperformance is .

- turnover ratios.
- profitability ratios.
- short term solvency ratio.
- long term solvency ratio.

Q9 | Return on investment is a .

- turnover ratios.
- short term solvency ratio.
- profitability ratios.
- long term solvency ratio.

Q10 | Net profit ratio is a .

- turnover ratio.
- long term solvency ratio.
- short term solvency ratio
- profitability ratio.

Q11 | Stock turnover ratio is a .

- turnover ratio.
- profitability ratio.
- short term solvency ratio.
- long term solvency ratio.

Q12 | Current ratio is a

- short-term solvency ratio.
- long-term solvency ratio.
- profitability ratio.
- turnover ratio.

Q13 | Proprietary ratio is a .

- short-term solvency ratio.
- long-term solvency ratio.
- profitability ratio.
- turnover ratio.

Q14 | Fixed assets ratio is a

- short-term solvency ratio.
- long-term solvency ratio.
- profitability ratio.
- turnover ratio.

Q15 | Fixed assets turnover ratio is a

- short-term solvency ratio.
- long-term solvency ratio.
- profitability ratio.
- turnover ratio.

Q16 | The ratio which measures the profit in relation to capital employed is known as

- return on investment.
- gross profit ratio.
- operating ratio.
- operating profit ratio.

Q17 | The ratio which determines the profitability from the shareholder’s point ofview is .

- return on investment.
- gross profit ratio.
- return on shareholders funds.
- operating profit ratio.

Q18 | Return on equity is also called

- return on investment.
- gross profit ratio.
- return on shareholders funds.
- return on net worth.

Q19 | Preliminary expenses is an example of

- fixed assets.
- current assets.
- fictitious assets.
- current liabilities.

Q20 | Prepaid expenses is an example of .

- fixed assets.
- current assets.
- fictitious assets.
- current liabilities.

Q21 | The ratio which is calculated to measure the productivity of total assets is

- return on equity.
- return on share holders funds.
- return on total assets.
- return on equity share holders’ funds.

Q22 | The ratio which shows the proportion of profits retained in the business out ofthe current year’s profits is

- retained earnings ratio.
- pay out ratio
- earnings per share.
- price earnings ratio.

Q23 | The ratio which indicates earnings per share reflected by the market price is .

- retained earnings ratio.
- pay out ratio.
- earnings per share.
- price earnings ratio.

Q24 | The ratio establishes the relationship between profit before interest and taxand fixed interest charges is .

- interest cover ratio.
- fixed dividend cover ratio.
- debt service coverage ratio.
- dividend yield ratio.

Q25 | The ratio shows the preference dividend as a proportion of profit available forshareholders is

- interest cover ratio.
- fixed dividend cover ratio.
- debt service coverage ratio.
- dividend yield ratio.