# Management Accounting MCQs with solved answers (Ratio analysis)

### 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;
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;
Interest on Debentures ₹ 20,000.

Profit on sale of Plant ₹ 8,000.

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

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