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Management Accounting MCQs with solved answers (Ratio analysis)

1. The revenue from operations of ALPHA Ltd. is ₹ 15,40,000.

Return Inward ₹ 40,000
Cost of revenue from operation is ₹ 9,00,000;
Operating expenses are ₹ 1,75,000;
Commission received is ₹ 25,000;
Profit from sale of fixed asset is ₹ 20,000.
The Operating Profit Ratio of ALPHA Ltd will be:
(a) 30%
(b) 31·33%
(c) 34%
(d) None of these

2. From the given particulars of TARA Ltd., the Trade Receivables Turnover Ratio of the company will be:
Revenue from Operations (₹)24,00,000
Cash Revenue from Operations 25% of Credit Revenue from Operations
Gross Debtors (₹)3,80,000
Bills Receivable (₹)1,00,000
Provision for Doubtful Debts (₹)20,000
(a) 3·75 times
(b) 4 times
(c) 4·17 times
(d) 8 times

2. From the given particulars of TARA Ltd., the Average collection period of the company will be:
Revenue from Operations (₹)24,00,000
Cash Revenue from Operations 25% of Credit Revenue from Operations
Gross Debtors (₹)3,80,000
Bills Receivable (₹)1,00,000
Provision for Doubtful Debts (₹)20,000
(a) 91 Days
(b) 94 Days
(c) 96 Days
(d) 4 Months

4. The Current Ratio of a Mohit company is 2·8:1 and its Quick Ratio is 2·6:1.
From the following transactions, pick out the transaction which involves an increase in both the Current Ratio and Quick Ratio:
(a) Goods worth ₹ 20,000 sold at a loss of ₹ 5,000.
(b) Rent of ₹ 5,000 paid in advance.
(c) Furniture purchased for ₹ 9,000.
(d) Bills Payable of ₹ 10,000 honoured on the due date.

5. The correct formula for computing Earning per share is:
(a) 𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑇𝑎𝑥/ 𝑁𝑜. 𝑜𝑓 𝑆ℎ𝑎𝑟𝑒𝑠
(b) 𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑇𝑎𝑥 𝑎𝑛𝑑 𝑃𝑟𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑/𝑁𝑜. 𝑜𝑓 𝑆ℎ𝑎𝑟𝑒𝑠
(c) 𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑇𝑎𝑥 𝑎𝑛𝑑 𝑃𝑟𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑/𝑁𝑜. 𝑜𝑓 𝐸𝑞𝑢𝑖𝑡𝑦 𝑆ℎ𝑎𝑟𝑒𝑠
(d) 𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑇𝑎𝑥 𝑎𝑛𝑑 𝑃𝑟𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑/𝑁𝑜. 𝑜𝑓 𝑃𝑟𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑆ℎ𝑎𝑟𝑒

Note: Answers are ginen below at the end.

ISC Economics 12 Demand MCQs With Solved Answer

Management Accounting MCQs with solved answers (Ratio analysis)

6. The particulars of Alpha Ltd are given below:
Equity Share Capital (₹)2,00,000
5% Preference Share Capital (₹)60,000
General Reserve (₹)2,10,000
Fixed Assets (₹)7,05,000
Current Assets (₹)1,95,000
Current Liabilities (₹)40,000
Loan @ 10% interest (₹)5,00,000
Tax provided during the year (₹)60,000
Profit for the current year after interest and tax (available for the shareholders) (₹) 1,90,000 The Interest Coverage Ratio of the company will be:
(a) 6 times
(b) 5 times
(c) 3·4 times
(d) 2·4 times

7. The particulars of BATA Ltd are given below:
Equity Share Capital (₹)4,00,000
5% Preference Share Capital (₹)2,00,000
General Reserve (₹)2,00,000
Fixed Assets (₹)7,50,000
Current Assets (₹)2,50,000
Current Liabilities (₹)40,000
Loan @ 10% interest (₹)1,60,000
Proprierary Ratio of the company will be:
(a) .8:1
(b) ·75:1
(c) ·70:1
(d) ·06:1

8. The particulars of Mohita Ltd are given below:
Total Debts (₹)4,80,000
Total Assets (₹)6,60,000
Current Liabilities (₹)3,60,000
Debt Equity Ratio of the company will be:
(a) .8:1
(b) ·67:1
(c) ·70:1
(d) None of these.

9. A company earns Gross profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was (₹)5,00,000; Equity Share Capital of the company was (₹)10,00,000; Reserves and Surplus (₹)2,00,000; Long Term Loan (₹)3,00,000 and Non Current Assets were (₹)10,00,000. The ‘Working capital turnover ratio’ of the company will be?

(a) 6 times
(b) 5 times
(c) 3·4 times
(d) 2·4 times

10. The revenue from operations of SARITA Ltd. is ₹ 8,00,000.

Cost of revenue from operation is ₹ 6,00,000;
Operating expenses are ₹ 50,000;
Discount received is ₹ 50,000;
Interest on Debentures ₹ 20,000.

Profit on sale of Plant ₹ 8,000.

Dividend Received ₹ 12,000.
The Operating Profit Ratio of SARITA Ltd will be:
(a) 25%
(b) 31·67%
(c) 34%
(d) None of these

The particulars of JSMR Ltd are given below:
Sundry debtors ₹4,00,000
Stock ₹160,000
Marketable securities ₹80,000
Cash ₹120,000
Prepaid expenses ₹40,000
Bill payables ₹80,000
Sundry creditors ₹160,000
Debentures ₹200,000
Outstanding ₹ Expenses 160,000

The Current Ratio of JSMR Ltd will be:

(a) 2:1
(b) 1:1
(c) 3:1
(d) None of these

Note: Answers are ginen below at the end.

Management Accounting MCQs with solved answers (Ratio analysis)

Answer – Question Number 1 To 11

1. Answer- (a) 30%

2. Answer- (b) 4 times

3. Answer- (a) 91 Days

4. Answer- (d) Bills Payable of ₹ 10,000 honoured on the due date.

5. Answer-(c) 𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑇𝑎𝑥 𝑎𝑛𝑑 𝑃𝑟𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑/𝑁𝑜. 𝑜𝑓 𝐸𝑞𝑢𝑖𝑡𝑦 𝑆ℎ𝑎𝑟𝑒𝑠

6. Answer-(a) 6 times

7. Answer-(a) .8:1

8. Answer- (a) .8:1

9. Answer-(b) 5 times

10. Answer- (a) 25%

11.Answer- (a) 2:1