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This set of Management Accounting Multiple Choice Questions & Answers (MCQs) focuses on Management Accounting Set 12

Q1 | Coverage of fixed assets by shareholder’s equity is a good tests of----------------
  • solvency
  • liquidity
  • Activity
  • profitability
Q2 | Net worth refers to owner’s--------------------------
  • Equity
  • Solvency
  • Liability
  • None of these
Q3 | Ratio to assess the short term debt paying capacity of a firm is----------
  • Debt equity ratio
  • Propriety ratio
  • Liquid ratio
  • Solvency ratios
Q4 | The ratio which is used to ascertain the soundness of the long term financial position is------------
  • Debt equity ratio
  • Liquidity ratio
  • Activity ratio
  • Gross profit ratio
Q5 | If the current assets and working capital of a company are rs.80,000 and rs.50000 then current liability will be-------------
  • Rs.1,00,000
  • Rs.1,30,000
  • Rs.70000
  • Rs.30000
Q6 | The ratio which is a good indicator to maintain the correct selling price and efficiency of trading activity is------
  • Net profit ratio
  • Gross profit ratio
  • Current ratio
  • Liquid ratios
Q7 | Return on investment is a----------------
  • Profit and loss account ratio
  • Balance sheet ratio
  • Combined ratio
  • Position statement ratio
Q8 | Debtors turnover ratio also known as----------
  • Payable turnover
  • Receivable turnover ratio
  • Creators turnover ratio
  • Debtors velocity
Q9 | The operating profit and net sale of a firm are rs.2,00,000 and rs.10,00,000 respectively then operating ratio will be
  • 20%
  • 5%
  • 50%
Q10 | 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
Q11 | Net capital employed is equal to ---------------
  • Total assets minus liabilities
  • Fixed asset plus net working capital
  • Total asset minus long-term liabilities
  • Total assets
Q12 | Ratio of net profit before interest and tax to sales is------------------------------
  • Solvency ratio
  • Capital gearing
  • Operating profit ratio
  • None of these
Q13 | Lower stock turnover ratio indicates-------------------------------
  • Solvency position
  • Monopoly situation
  • Over investment in inventory
  • None of these
Q14 | Collection of book debts-----
  • Has no effect on current ratio
  • Has decreased in current ratio
  • Has increased in current ratio
  • None of these
Q15 | Debt equity ratio is a--------------------------------------
  • Profitability ratio
  • Turnover ratio
  • Short term solvency ratio
  • Long term solvency ratio
Q16 | Market price per share divided by earnings per share is-------
  • Price earning ratio
  • Return on equity
  • Market test ratio
  • Book value per share
Q17 | Solvency ratio indicates-----------------
  • Credit worthiness
  • Activity
  • Profitability
  • None of these
Q18 | Current ratio shows-----
  • The change in gross profit
  • The working capital position
  • The liquidity of assets
  • The change in net profit
Q19 | Current ratio is 4:1, the amount of current liabilities is Rs.12000 the amount of working capital is-----
  • Rs.48,000
  • Rs.36000
  • Rs.30000
  • Rs.60000
Q20 | Stock turnover ratio is used to determine -----------------------of an enterprise
  • Profitability
  • Liquidity& solvency
  • Efficiency
  • Growth
Q21 | Working capital is expressed as------
  • Current asset-fixed asset
  • Fixed assets-current liabilities
  • Current assets-current liabilities
  • None of these
Q22 | Dividend yield is an example for------ratio
  • Solvency
  • Liquidity
  • Market strength
  • Net worth
Q23 | Debtors turnover ratio is used to calculate------
  • efficiency
  • solvency
  • liquidity
  • profitability
Q24 | Rol measures-----
  • Profitability in relation to investment
  • Profitability in relation to sales
  • Operating efficiency
  • Long term solvency
Q25 | Debtors turnover ratio measures----------
  • Short term solvency
  • Operating efficiency
  • Long term solvency
  • Credit policy