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Management Accounting MCQs

Management Accounting MCQs with solved answers (Ratio analysis) Question 1-5

1. Ratio may be expressed in the:

(a) Pure Ratio
(b) So many times
(c) Percentage
(d) Fractions
(e) All of these

2. Which ratios is not included in the Balance Sheet ratio:

(a) Current Ratio
(b) Quick Ratio
(c) Debt Equity Ratio
(d) Debt to Total assets ratio
(e) Operating Ratio

3. Which of the following is not the statement of P&L Ratio:

(a) Gross Profit Ratio
(b) Net Profit Ratio
(c) Operating Ratio
(d) Operating Profit Ratio
(e) Proprietary Ratio

4. Which of the following includes Composite Ratio:

(a) Trade Receivables Turnover Ratio
(b) Trade Payable Turnover Ratio
(c) Working Capital Turnover Ratio
(d) Inventory Turnover Ratio
(e) All of these

5. Liquidity Ratios include:

(a) Current Ratio
(b) Quick Ratio
(c) A and B
(d) None of these

Note: Answers are ginen below at the end.

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Management Accounting MCQs with solved answers (Ratio analysis) Question 6-10

6. Activity Ratio includes:

(a) Inventory Turnover Ratio
(b) Trade Payable Turnover Ratio
(c) Working Capital Turnover Ratio
(d) Trade Receivables Turnover Ratio
(e) All of these

7. Which of the following is not the statement of Profitability Ratio:

(a) Gross Profit Ratio
(b) Net Profit Ratio
(c) Return on Investment
(d) Interest Coverage Ratio
(e) Net Operating Profit Ratio

8. Which of the following is Solvany Ratio:

(a) Interest Coverage Ratio
(b) Proprietary Ratio
(c) Debt Equity Ratio
(d) Debt to Total assets ratio
(e) All of these

9. Working Capital Ratio explains the relationship between:

(a) Current Assets and Current Liability
(b) Liquid Assets and Current Liability
(c) Current Assets and Non-Current Liability
(d) Current Assets and Working Capital

10. Working Capital Turnover Ratio explains the relationship between:

(a) Revenue from Operations and Working Capital
(b) Net credit purchase and Working Capital
(c) Credit Revenue from Operations and Working Capital
(d) Revenue from Operations and Total Capital

Note: Answers are ginen below at the end.

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Management Accounting MCQs with solved answers (Ratio analysis) Question 11-15

11. An Ideal current Ratio should be:

(a) 2:1
(b) 1:1
(c) 1:2
(d) None of these

12. Current Assets includes:

(a) Inventory
(b) Trade Receivable
(c) Current Investment
(d) Cash and Bank Balance
(e) All of These

13. Current Liabilities Include:

(a) Bank Overdraft
(b) Trade Payable
(c) Provision Factor
(d) Outstanding Expense
(e) All of these

14. An Ideal Liquid Ratio should be:

(a) 2:1
(b) 1:1
(c) 1:2
(d) 4:1

15. Current Assets include:

(a) Building
(b) Land
(c) Current Investments
(d) Furniture

Note: Answers are ginen below at the end.

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Management Accounting MCQs with solved answers (Ratio analysis) Question 16-20

16. Items not included in liquid Assets:

(a) Inventories and Prepaid Expenses
(b) Current Investments
(c) Cash and Bank Balance
(d) Trade Receivables

17. Total Assets- 16,00,000

Fixed Assets- 10,80,000
Non Current Investment- 2,20,000
Shareholders funds- 12,00,000
Non-Current Liabilities- 1,60,000
Current Ratio-

(a) 300000/240000
(b) 520000/240000
(c) 520000/400000
(d) None of these

18. The current Ratio of a company is 2:1. Repayment of a current Liability, current tario is:

(a) Improve
(b) Reduce
(c) Not Alter
(d) None of these

Management Accounting MCQs with solved answers- Ratio analysis

19. The current Ratio of a company is 2:1. Goods purchased on credit. The revised current Ratio will be:

(a) 2:1
(b) 1:8
(c) 1:8:1
(d) None of these

20. The current Ratio of a company is 2:1. ₹50,000 cash collected from Debtors of ₹60,000 in fall find settlement Goods purchased on credit the revised. The Revised Current Ratio will be:

(a) 2:1
(b) 1:90:1
(c) 2:10:1
(d) None of these

Note: Answers are ginen below at the end.

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Management Accounting MCQs with solved answers (Ratio analysis) Question 21-25

21. Which ratio measures the firm’s ability to meet its short term – obligations in time ?

(a) Profilabilily ratios

(b) liquidily ratios

(d) Solvency ratios

Management Accounting MCQs with solved answers- Ratio analysis

22. Cost Of Revenue From Operation (COGS) ?

(a) Opening Inventory + Net Purchases + Direct Expenses – Closing Inventory

(b) Opening Inventory + Net Purchases + Indirect Expenses – Closing Inventory

(d) Opening Inventory + Purchases + Direct Expenses – Closing Inventory

23. Shareholders Fund ?

(a) Share Capital + Reserves and Surplus
(b) Total Assets – Non Current Liabilities – Current liabilities

(d) None of these

24. Liquidity ratios are expressed in:
(a) Pure ratio form
(b) Percentage
(c) Rate or time
(d) None of the above

25.Liquid Ratio is also known as:

(a) Quick Ratio
(b) Acid Test Ratio
(c) a and b
(d) None of the above

Management Accounting MCQs with solved answers- Ratio analysis

Note: Answers are ginen below at the end.

Management Accounting MCQs with solved answers (Ratio analysis) Question 26-30

26. Current Ratio is also known as:

(a) Quick Ratio
(b) Acid Test Ratio
(c) Working capital Ratio
(d) None of the above

27. Revenue from operations (Sales) Rs 1,50,000
Cost of revenue from operations Rs 1,20,000
Operating expenses Rs. 15,000

Gross profit ratio and Net profit ratio will be:

(a) 20%,10%.
(b) 15%,10%.
(c) 10%,20%.
(d) 10%,10%.

Management Accounting MCQs with solved answers- Ratio analysis

28. X Ltd. has a 10% long-term loan of Rs.20,00,000. Its net profit before interest and tax was Rs. 9,00,000. Interest coverage ratio?

(a) 5 Times
(b) 4.5 Times
(c) 9 Times
(d) None of these.

29.Which Ratio is an indication of the speed with which a company collects its
debts?

(a) Debtors Tornover Ratio
(b) Creditors Tornover Ratio
(c) Stock Turnover Ratio
(d) None of these.

Management Accounting MCQs with solved answers- Ratio analysis

30.From the following information calculate opening inventory and closing inventory:
Revenue from operations (sales) during the year = Rs. 2,00,000
Gross profit on sales = 50%
Inventory turnover ratio = 4 times
If closing inventory was Rs.10,000 more than the opening inventory what will be the amount for the opening inventory and closing inventory?

(a) Rs.20,000 and Rs. 30,000
(b) Rs.30,000 and Rs. 20,000
(c) Rs.25,000 and Rs. 35,000
(d) None of these.

Answer – Question Number 1 To 30

1. Answer- (e) All of these

2. Answer- (e) Operating Ratio.

3. Answer- (e) Proprietary Ratio

4. Answer- (e) All of these

5. Answer-(c) A and B

6. Answer- (e) All of these

7. Answer- (d) Interest Coverage Ratio

8. Answer-(e) All of these

9. Answer-(a) Current Assets and Current Liability

10. Answer-(a) Revenue from Operations and Working Capital

11. Answer-(a) 2:1

12. Answer-(e) All of these.

13. Answer-(e) All of these.

14. Answer-(b) 1:1

15. Answer-(c) Current Investments

16. Answer-(a) Inventories and Prepaid Expenses

17. Answer-(a) 300000/240000

(Current Assets = Total Assets – ( Fixed Assets+Non Current Investment)
(Current Liabilities = Total Assets – (Shareholders funds + Non Current Liabilities)
18. Answer-(a) Improve

19. Answer-(c) 1:8:1

20. Answer-(b) 1:90:1

21. Answer- (b) liquidily ratios

22. Answer- (a) Opening Inventory + Net Purchases + Direct Expenses – Closing Inventory

23. Answer- (c) a and b

24. Answer- (a) Pure ratio form

25. Answer- (c) a and b

26. Answer- (c) Working capital Ratio

27. Answer- (a) 20%,10%.

28. Answer-(b) 4.5 Times

29. Answer-(a) Debtors Tornover Ratio

30. Answer-(a) Rs.20,000 and Rs. 30,000

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