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InterviewSolution
This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Cost of revenue from operations Rs. 6,00,000, Inventory Turnover Ratio 5, Find out the value of opening inventory, if opening inventory is Rs. 8,000 less than the closing inventory.A. Rs. 1,12,000B. Rs. 1,16,000C. Rs. 1,28,000D. Rs. 1,24,000 |
| Answer» Correct Answer - B | |
| 2. |
What will be the amount of Gross Profit, if revenue from operations are Rs. 6,00,000 and Gross Profit Ratio is `20%` of cost?A. Rs. 1,50,000B. Rs. 1,00,000C. Rs. 1,20,000D. Rs. 5,00,000 |
| Answer» Correct Answer - B | |
| 3. |
The following groups of ratios are primarily measure risk:A. liquidity, activity, and profitabilityB. liquidity, activity, and inventoryC. liquidity, activity, and debtD. liquidity, debt and profitability |
| Answer» Correct Answer - D | |
| 4. |
The …………… ratios provide the information critical to the long run operation of the firm.A. LiquidityB. ActivityC. SolvencyD. Profitability |
| Answer» Correct Answer - C | |
| 5. |
The ……… of a business firm is measured by its ability to satisfy its short term obligations as they become due.A. ActivityB. LiquidityC. DebtD. Profitability |
| Answer» Correct Answer - B | |
| 6. |
ABC Co. extends credit terms of 45 days to its customers. Its credit collection would be considered poor if its average collection period was.A. 30 daysB. 36 daysC. 47 daysD. 37 days |
| Answer» Correct Answer - C | |
| 7. |
Current Ratio is :A. Solvency RatioB. Liquidity RatioC. Activity RatioD. Profitability Ratio |
| Answer» Correct Answer - B | |
| 8. |
The _________ is useful in evaluating credit and collection policies.A. average payment periodB. current ratioC. average collection periodD. current asset turnover |
| Answer» Correct Answer - C | |
| 9. |
Current Ratio of a Company is `2.5:1`. If its working capital is Rs. 60,000, its current liabilities will be:A. Rs. 40,000B. Rs. 60,000C. Rs. 1,00,000D. Rs. 24,000 |
| Answer» Correct Answer - A | |
| 10. |
Credit revenue from operations Rs. 6,00,000, Cash revenue from operations Rs. 1,50,000, Debtors Rs. 1,00,000, B/R Rs. 50,000. Average Collection Period will be :A. 2 MonthsB. 2.4 MonthsC. 3 MonthsD. 1.6 Months |
| Answer» Correct Answer - C | |
| 11. |
Two basic measures of liquidity are :A. Inventory turnover and Current ratioB. Current ratio and Quick ratioC. Gross Profit ratio and Operating ratioD. Current ratio and Average Collection Period |
| Answer» Correct Answer - B | |
| 12. |
Total credit revenue from operations of a firm is Rs. 5,40,000. Average collection period is 3 months. Opening debtors are Rs. 1,10,000. Its closing debtors will be:A. Rs. 1,35,000B. Rs. 1,60,000C. Rs. 2,20,000D. Rs. 1,80,000 |
| Answer» Correct Answer - B | |
| 13. |
Credit revenue from operations Rs. 5,60,000, Debtors Rs. 70,000, B/R Rs. 10,000. Average Collection Period will be :A. 52 DaysB. 53 DaysC. 45 DaysD. 46 Days |
| Answer» Correct Answer - B | |
| 14. |
The two basic measures of liquidity are:A. inventory turnover and current ratioB. current ratio and liquid ratioC. gross profit margin and operating ratioD. current ratio and average collection period |
| Answer» Correct Answer - B | |
| 15. |
_________ ratios are a measure of the speed with which various accounts are converted into revenue from operations or cash:A. activityB. liquidityC. debtD. profitability |
| Answer» Correct Answer - A | |
| 16. |
The _________ is a measure of liquidity which excludes _______, generally the least liquid asset:A. current ratio, trade receivableB. liquid ratio, trade receivableC. current ratio, inventoryD. liquid ratio, inventory |
| Answer» Correct Answer - D | |
| 17. |
Liquid Assets:A. Current Assets - Prepaid Exp.B. Current Assets - Inventory + Prepaid Exp.C. Current Assets - Inventory - Prepaid Exp.D. Current Assets + Inventory - Prepaid Exp. |
| Answer» Correct Answer - C | |
| 18. |
Currrent liabilities of a company were Rs. 2,00,000 and its current ratio was `2.5:1`. After this the company paid Rs. 1,00,000 to a trade payable. The current ratio after the payment will be:A. `2:1`B. `4:1`C. `5:1`D. None of the above |
| Answer» Correct Answer - B | |
| 19. |
The formula for calculating Trade Payables Turnover Ratio is :A. `("Net Credit Purchase")/("Average Creditors")`B. `("Net Credit Purchase")/("Average Creditors + Average Bills Payable")`C. `("Cash Purchases")/("Total Creditors")`D. None of the Above |
| Answer» Correct Answer - B | |
| 20. |
Current Assets of a Company were Rs. 1,00,000 and its current ratio was `2:1`. After this the company paid Rs. 25,000 to a trade payable. The current ratio after the payment will be:A. `5:1`B. `2:1`C. `3:1`D. `4:1` |
| Answer» Correct Answer - C | |
| 21. |
Opening Inventory Rs. 1,00,000, Closing Inventory Rs. 1,50,000, Purchases Rs. 6,00,000, Carriage Rs. 25,000. Wages Rs. 2,00,000. Inventory Turnover Ratio will be:A. 6.6 TimesB. 7.4 TimesC. 7 TimesD. 6.2 Times |
| Answer» Correct Answer - D | |
| 22. |
The ………… is a measure of liquidity which excludes ……… ,generally the least liquid asset.A. Current ratio, Accounts receivableB. Liquid ratio, Accounts receivableC. Current ratio, inventoryD. Liquid ratio, inventory |
| Answer» Correct Answer - D | |
| 23. |
Assuming liquid ratio of `1:2:1`, cash collected from debtors would:A. Increase liquid ratioB. decrease liquid ratioC. have no effect on liquid ratioD. Increase gross profit ratio |
| Answer» Correct Answer - C | |
| 24. |
Assuming that the current ratio is `2:1`, Cash paid against Bills Payable would:A. Increase Current ratioB. Decrease Current ratioC. have no effect on Current ratioD. decrease gross profit ratio |
| Answer» Correct Answer - A | |
| 25. |
Credit Purchases Rs. 12,00,000, Opening Creditors Rs. 2,00,000, Closing Creditors Rs. 1,00,000. Trade Payables Turnover Ratio will be :A. 6 timesB. 4 timesC. 8 timesD. 12 times |
| Answer» Correct Answer - C | |
| 26. |
Assuming that the current ratio is `2:1`, purchase of goods on credit would:A. Increase Current ratioB. Decrease Current ratioC. have no effect on Current ratioD. decrease gross profit ratio |
| Answer» Correct Answer - B | |
| 27. |
Total Purchases Rs. 4,50,000, Cash Purchases Rs. 1,50,000, Creditors Rs. 50,000, Bills Payables Rs. 10,000. Trade Payables Turnover Ratio will be :A. 7.5 timesB. 6 timesC. 9 timesD. 5 times |
| Answer» Correct Answer - D | |
| 28. |
Credit Purchase Rs. 9,60,000, Cash Purchases Rs. 6,40,000, Creditors Rs. 2,40,000, Bills Payable Rs. 80,000. Average Payment Period will be:A. 3 monthsB. 4 monthsC. 2.4 monthsD. 6 months |
| Answer» Correct Answer - B | |
| 29. |
On the basis of following data, the Debt-Enquity Ratio of a Company will be: Enquity Share Capital Rs. 5,00,000, General Reserve Rs. 3,20,000, Preliminary Expenses Rs. 20,000, Debentures Rs. 3,20,000, Current Liabilities Rs. 80,000.A. `1:2`B. `.52:1`C. `.4:1`D. `.37:1` |
| Answer» Correct Answer - C | |
| 30. |
In debt equity ratio, debt refers to:A. Short-Term DebtsB. Short Term & Long Term DebtsC. Total DebtsD. Debentures and Current Liabilities |
| Answer» Correct Answer - B | |
| 31. |
On the basis of following information received from a firm, its Debt-Equity Ratio will be: Equity Share Capital Rs. 5,80,000, Reserve Fund Rs. 4,30,000, Prelilminary Expenses Rs. 40,000, Long term Debts Rs. 1,28,900, Debentures Rs. 2,30,000.A. `.42:1`B. `.53:1`C. `.63:1`D. `.37:1` |
| Answer» Correct Answer - D | |
| 32. |
Debt Equity Ratio is :A. Liquidity RatioB. Solvency RatioC. Activity RatioD. Operating Ratio |
| Answer» Correct Answer - B | |
| 33. |
Debt equity ratio of a company is `1:2`. Which of the following transactions will increse it:A. Issue of new shares for cashB. Redemption of DebenturesC. Issue of Debentures for cashD. Goods purchased on credit |
| Answer» Correct Answer - C | |
| 34. |
Credit revenue from operations Rs. 24,00,000, Trade Receivables Turnover Ratio 6 times, Opening Debtors Rs. 3,20,000. Closing Debtors will be:A. Rs. 4,00,000B. Rs. 4,80,000C. Rs. 80,000D. Rs. 7,20,000 |
| Answer» Correct Answer - B | |
| 35. |
On the basis of following data, the proprietary ratio of a Company will be: Equity Share Capital Rs. 6,00,000, Debentures Rs. 2,40,000, Statement of Profit & Loss Debit Balance Rs. 40,000.A. `74%`B. `65%`C. `82%`D. `70%` |
| Answer» Correct Answer - D | |
| 36. |
Working Capital is the :A. Cash and Bank BalanceB. Capital borrowed from the BanksC. Difference between Current Assets and Current LiabilitiesD. Difference between Current Assets and Fixed Assets |
| Answer» Correct Answer - C | |
| 37. |
Quick Ratio is also known as:A. Liquid RatioB. Current RatioC. Working Capital RatioD. None of the Above |
| Answer» Correct Answer - A | |
| 38. |
Ideal Current Ratio is :A. `1:1`B. `1:2`C. `1:3`D. `2:1` |
| Answer» Correct Answer - D | |
| 39. |
Current Assets do not include:A. Prepaid ExpensesB. InventoryC. GoodwillD. Bills Receivable |
| Answer» Correct Answer - C | |
| 40. |
Liquid Assets do not include :A. Bills ReceivableB. DebtorsC. InventoryD. Bank Balance |
| Answer» Correct Answer - C | |
| 41. |
Quick Assets do not includeA. Cash in handB. Prepaid ExpensesC. Marketable SecuritiesD. Trade Receivables |
| Answer» Correct Answer - B | |
| 42. |
If average inventory is Rs. 50,000 and closing inventory is Rs. 2,000 less than the opening inventory, opening and closing inventory will be:A. Rs. 52,000 and Rs. 50,000B. Rs. 50,000 and Rs. 48,000C. Rs. 48,000 and Rs. 46,000D. Rs. 51,000 and Rs. 49,000 |
| Answer» Correct Answer - D | |
| 43. |
If the inventory turnover ratio is divided into 365, it becomes a measure of …………..A. Sales efficiencyB. Average Age of InventoryC. Sales TurnoverD. Average Collection Period |
| Answer» Correct Answer - B | |
| 44. |
Opening Inventory Rs. 75,000, Closing Inventory Rs. 1,05,000, Inventory Turnover Ratio 6, Gross Profit `20%` on cost, what will be Gross Profit?A. Rs. 1,35,000B. Rs. 1,08,000C. Rs. 90,000D. Rs. 18,000 |
| Answer» Correct Answer - B | |
| 45. |
On the basis of following information received from a firm, its Proprietary Ratio will be: Fixed Assets Rs. 3,30,000, Current Assets Rs. 1,90,000, Preliminary Expenses Rs. 30,000, Equity Share Capital Rs. 2,44,000, Preference Share Capital Rs. 1,70,000, Reserve Fund Rs. 58,000.A. `70%`B. `80%`C. `85%`D. `90%` |
| Answer» Correct Answer - C | |
| 46. |
Which of the following is not operating expenses?A. Office ExpensesB. Selling ExpensesC. Bad DebtsD. Loss by Fire |
| Answer» Correct Answer - D | |
| 47. |
Purchase Rs. 7,20,000, Office Expenses Rs. 30,000, Selling Expenses Rs. 90,000, Opening Inventory Rs. 1,40,000, Closing Inventory Rs. 80,000, Revenue from Operations Rs. 12,00,000. Calculate operating ratioA. `60%`B. `75%`C. `70%`D. `65%` |
| Answer» Correct Answer - B | |