Accounting Mcqs

Page No. 31

Budgeting is difficult to apply in the following cases


aProducts subjected to rapid changes

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bJob order manufacturing

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cUncertain market condition

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dAll of the above

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View Answer All of the above

Sales expenditure budget is prepared by estimating the expense(s) of


aAdvertisement

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bMarket analysis

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cSalesman's salary

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dAll of the above

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View Answer All of the above

A low Return on Investment Ratio (ROI) indicates


aImproper utilization of resources

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bOver investment in assets

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cBoth A and B

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dNone of the above

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View Answer Both A and B

Return on Investment Ratio (ROI) =


a(Gross profit / Net sales) x 100

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b(Gross profit x Sales / Fixed assets) x 100

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c(Net profit / Sales) x 100

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d(Net profit / Total assets) x 100

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A higher inventory ratio indicates


aBetter inventory management

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bQuicker turnover

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cBoth A and B

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dNone of the above

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View Answer Both A and B

Lower the Debt Equity ratio


aLower the protection to creditors

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bHigher the protection to creditors

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cIt does not affect the creditors

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dNone of the above

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Liquid or Quick assets =


a Current assets - (Stock + Work in progress)

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bCurrent assets + Stock + Work in progress

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c(Current assets + Stock) + Work in progress

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d(Current assets + Work in progress) - Stock

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Current ratio =


aQuick assets/Current liabilities

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bCurrent assets/Current liabilities

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cDebt/Equity

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dCurrent assets/Equity

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The following is (are) the current liability (ies)


aBills payable

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bOutstanding expenses

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cBank Overdraft

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dAll of the above

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View Answer All of the above

The measure of how efficiently the assets resources are employed by the firm is called


aLiquidity ratio

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bLeverage ratio

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cActivity ratio

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dProfitability ratio

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View Answer Activity ratio

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