Question 1

Profit and losses can't be ascertained because Trading and Profit and loss account can't be prepared.

Accepted Answer

A)  true
B)  false
C)  may be true
D)  may be falseE) None of the above
F) C) and D)

Question 2

The relationship between two financial variables can be expressed in:

Accepted Answer

A)  Pure ratio
B)  Percentage
C)  Rate or time
D)  all the aboveE) C) and D)
F) None of the above

Question 3

Stock is considered as a liquid asset as anytime it can be converted into cash immediately.

Accepted Answer

A)  Yes
B)  No
C)  Only YES
D)  None of the aboveE) B) and C)
F) A) and C)

Question 4

The gross profit represents the net margin.

Accepted Answer

A)  false
B)  true
C)  both a and b
D)  may be falseE) B) and D)
F) A) and B)

Question 5

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

Accepted Answer

A)  Profit before tax but after interest
B)  Profit before interest &tax
C)  Profit after interest & tax
D)  All the aboveE) A) and B)
F) B) and C)

Question 6

They record a few translation completely just like the double entry system but a majority of the transactions are recorded only partially is known as incomplete records.

Accepted Answer

A)  true
B)  false
C)  both a and b
D)  none of the aboveE) C) and D)
F) A) and B)

Question 7

Current ratio indicates the solvency position of the business.

Accepted Answer

A)  true
B)  false
C)  may be false
D)  a and bE) A) and B)
F) A) and C) A

Question 8

Working capital turnover ratio can be determined by :

Accepted Answer

A)  ( Gross profit / Working capital ) 
B)  ( Cost of goods sold / Net sales ) 
C)  ( Cost of goods sold / Working capital) 
D)  None of the aboveE) All of the above
F) None of the above

Question 9

Ratio analysis is an important means of expressing the relationship between two numbers.

Accepted Answer

A)  true
B)  false
C)  may be false
D)  a and b bothE) B) and C)
F) A) and C)

Question 10

Liquidity ratios are expressed in

Accepted Answer

A)  Pure ratio form
B)  Percentage
C)  Rate or time
D)  None of the aboveE) None of the above
F) A) and C)

Question 11

Under single entry system the profit and loss can be found out and also it's comparison will be available.

Accepted Answer

A)  true
B)  false
C)  both and b
D)  only falseE) All of the above
F) A) and D) B

Question 12

Ratio analysis helps in investment decision.

Accepted Answer

A)  true
B)  false
C)  may be true
D)  a & b bothE) B) and C)
F) A) and B)

Question 13

Single entry system is mixture of single entry, double entry and no entry.

Accepted Answer

A)  true
B)  may be false
C)  only true
D)  none of the aboveE) None of the above
F) B) and D)

Question 14

Which of the following is not included in current assets.

Accepted Answer

A)  Debtors
B)  Stock
C)  Cash at bank
D)  Cash in handE) B) and D)
F) A) and B)

Question 15

When the concept of ratio is defined in respect to the item shown in the financial statements, it is termed as

Accepted Answer

A)  Accounting ratio
B)  Financial ratio
C)  costing ratio
D)  none of the aboveE) All of the above
F) B) and D)

Question 16

What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold is Rs 2,00,000 & sales return is Rs10,000 ?

Accepted Answer

A)  13 %
B)  28%
C)  26%
D)  20%E) B) and D)
F) All of the above

Question 17

Liquid Ratio is also known as 2:1 ratio.

Accepted Answer

A)  false
B)  true
C)  either true or false
D)  none of the aboveE) A) and D)
F) A) and C)

Question 18

Liquid asset is determined by

Accepted Answer

A)  Current asset - stock - prepaid expense
B)  Current asset + Stock +prepaid expense
C)  Current asset + prepaid expense
D)  None of the aboveE) None of the above
F) A) and D) A

Question 19

Return on properties funds is also known as.

Accepted Answer

A)  Return on net worth
B)  Return on shareholders fun
C)  Return on the shareholders investment
D)  All the aboveE) A) and C)
F) A) and B)

Question 20

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

Accepted Answer

A)  True
B)  False
C)  may be false
D)  both a and bE) B) and D)
F) None of the above

Exam 7: Financial Statements and Ratio Analysis

Profit and losses can't be ascertained because Trading and Profit and loss account can't be prepared.

Correct AnswerverifiedShow Answer

The relationship between two financial variables can be expressed in:

Correct AnswerverifiedShow Answer

Stock is considered as a liquid asset as anytime it can be converted into cash immediately.

Correct AnswerverifiedShow Answer

The gross profit represents the net margin.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

They record a few translation completely just like the double entry system but a majority of the transactions are recorded only partially is known as incomplete records.

Correct AnswerverifiedShow Answer

Current ratio indicates the solvency position of the business.

Correct AnswerverifiedA

Working capital turnover ratio can be determined by :

Correct AnswerverifiedShow Answer

Ratio analysis is an important means of expressing the relationship between two numbers.

Correct AnswerverifiedShow Answer

Liquidity ratios are expressed in

Correct AnswerverifiedShow Answer

Under single entry system the profit and loss can be found out and also it's comparison will be available.

Correct AnswerverifiedB

Ratio analysis helps in investment decision.

Correct AnswerverifiedShow Answer

Single entry system is mixture of single entry, double entry and no entry.

Correct AnswerverifiedShow Answer

Which of the following is not included in current assets.

Correct AnswerverifiedShow Answer

When the concept of ratio is defined in respect to the item shown in the financial statements, it is termed as

Correct AnswerverifiedShow Answer

What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold is Rs 2,00,000 & sales return is Rs10,000 ?

Correct AnswerverifiedShow Answer

Liquid Ratio is also known as 2:1 ratio.

Correct AnswerverifiedShow Answer

Liquid asset is determined by

Correct AnswerverifiedA

Return on properties funds is also known as.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified