# MCQs For NCERT Class 12 Accountancy Chapter 5 Accounting Ratios

Please refer to the MCQ Questions for Class 12 Accountancy Chapter 5 Accounting Ratios with Answers. The following Accounting Ratios Class 12 Accountancy MCQ Questions has been designed based on the latest syllabus and examination pattern for Class 12. Our experts have designed MCQ Questions for Class 12 Accountancy with Answers for all chapters in your NCERT Class 12 Accountancy book.

## Accounting Ratios Class 12 MCQ Questions with Answers

See below Accounting Ratios Class 12 Accountancy MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question.Current Ratio is :
(a)Liquid Assets/Current Assets
(b)Fixed Assets/Current Assets
(c)Current Assets/Current Liabilities
(d)Liquid assets/Current Liabilities

C

Question.Working Capital is the :
(a)Cash and Bank Balance
(b)Capital borrowed from Banks
(c)Difference between Current Assets and Current Liabilities
(d)Difference between Current Assets and Fixed assets

C

Question.Opening Inventory Rs.1,00,000; Closing Inventory Rs.1,50,000; Purchases Rs.6,00,000; Carriage Rs.25,000; wages Rs.2,00,000. Inventory Turnover Ratio will be:
(a) 6.6 Times
(b) 7.4 Times
(c) 7 Times
(d) 6.2 Times

D

Question.Two basic measures of liquidity are:
(a) Inventory turnover and Current ratio
(b)Current ratio and Quick ratio
(c)Gross Profit ratio and Operating ratio
(d)Current ratio and average Collection period

B

Question.A Company’s liquid assets are Rs.5,00,000 and its current liabilities are Rs.3,00,000.Thereafter, it paid Rs.1,00,000 to its trade payables. Quick ratio will be:
(a)1.33:1
(b)2.5:1
(c)1.67:1
(d)2:1 all

D

Question.Fixed Assets Rs.5,00,000; Current Assets Rs.3,00,000; Equity Share Capital Rs.4,00,000; Reserve Rs.2,00,000;Long –term debts Rs.40,000.Proprietory Ratio will be:
(a)75%
(b)80%
(c)125%
(d)133%

A

Question.If Debt equity ratio exceeds ……………., it indicates risky financial position.
(a)1:1
(b)2:1
(c)1:2
(d)3:1

B

Question.Current ratio is:
(a)Solvency Ratio
(b)Liquidity ratio
(c)Activity Ratio
(d)Profitability Ratio

B

Question.Current assets include only those assets which are expected to be realized within……
(a)3 months
(b)6 months
(c)1 year
(d)2 years

C

Question.Equity Share Capital Rs.20,00,000; Reserves Rs.5,00,000; Debentures Rs.10,00,000; Current Liabilities Rs.8,00,000. Debt-equity ratio will be:
(a) 0.4 : 1
(b) 0.32 : 1
(c) 0.72 : 1
(d) 0.5 : 1

A

Question.Liquid Assets do not include:
(a)Bills Receivable
(b)Debtors
(c)Inventory
(d)Bank Balance

C

Question.On the basis of following data, the Debt-Equity Ratio of a Company will be: Equity Share Capital Rs.5,00,000; General Reserve Rs.3,20,000; Preliminary Expenses Rs.20,000; Debentures Rs.3,20,000; Preliminary Expenses Rs.20,000; Debentures Rs.3,20,000; Current Liabilities Rs.80,000.
(a) 1:2
(b) 0.52:1
(c) 0.4:1
(d) 0.37:1

C

Question.A Company’s Quick Ratio is 1.5:1; Current Liabilities are Rs.2,00,000 and Inventory is Rs.1,80,000.Current Ratio will be:
(a)0.9:1
(b)1.9:1
(c)1.4:1
(d)2.4:1

D

Question.On the basis of the following information received from a firm, its Proprietory Ratio will be:
Fixed Assets Rs.3,30,000; Current Assets Rs.1,90,000; Preliminary Expenses Rs.30,000; Equity share Capital Rs.2,44,000; Preference Share capital Rs.1,70,000; Reserve Fund Rs.58,000.

(a)70%
(b)80%
(c)85%
(d)90%

C

Question.Ideal Current Ratio is:
(a)1:1
(b)1:2
(c)1:3
(d)2:1

D

Question.Revenue from Operations Rs.6,00,000; Gross Profit 20%; Office Expenses Rs.30,000;Selling Expenses Rs.48,000.Calculate operating ratio.
(a) 80%
(b) 85%
(c) 96.33%
(d) 93%

D

Question.On the basis of the following information received from a firm, its Total Assets-Debt ratio will be:
(a) 40%
(b) 60%
(c) 30%
(d) 70%

A

Question.Total revenue from operations Rs.9,00,000; Cash revenue from operations Rs.3,00,000; Debtors Rs.1,00,000; Debtors Rs.1,00,000; B/R Rs.20,000. Trade Receivables Turnover Ratio will be:
(a) 5 Times
(b) 6 Times
(c) 7.5 Times
(d) 9 Times

A

Question.A firm’s credit revenue from operations is Rs.3,60,000, cash revenue from operations is Rs.70,000. Cost of revenue from operations is Rs.3,61,200. Its gross profit ratio will be:
(a) 11%
(b) 15%
(c) 18%
(d)16%

D

Question.Revenue from Operations Rs.2,00,000; Inventory Turnover ratio 5; Gross Profit 25%. Find out the value of Closing Inventory, if Closing Inventory is Rs.8,000 more than the Opening Inventory.
(a) Rs.38,000
(b) Rs.22,000
(c) Rs.34,000
(d) Rs.26,000

C

True or False:

Question.Current ratio improves with increase in sales at profir.

True

Question.Solvency refers to the ability of the enterprise to meet its current obligations.

True

Question.Lower the Gross Profit Ratio, higher will be the profitability of a company.

False

Fill in the blanks

Question.……………is the process of determining and interpreting numerical relationship between figures of the financial statements.