(A) Liquidity Ratios  (D) 2 years

 1. Two basic measures of liquidity Answer Answer: C

are:  8. The ………………… of a business
 (A) Inventory turnover and Current firm is measured by its ability to
ratio satisfy its short-term obligations as
 (B) Current ratio and Quick ratio they become due.
 (C) Gross Profit ratio and Operating  (A) Activity
ratio  (B) Liquidity
 (D) Current ratio and Average  (C) Debt
Collection period  (D) Profitability
Answer Answer: B Answer Answer: B
9. Ideal Quick Ratio is:
2. Current Ratio is:  (A) 1: 1
 (A) Solvency Ratio  (B) 1: 2
 (B) Liquidity Ratio  (C) 1: 3
 (C) Activity Ratio  (D) 2: 1
 (D) Profitability Ratio Answer Answer: A

Answer Answer: B 10. Quick Assets do not include

 (A) Cash in hand
3. Current Ratio is:  (B) Prepaid Expenses
 (A) Liquid Assets/Current Assets  (C) Marketable Securities
 (B) Fixed Assets/Current Assets  (D) Trade Receivables
 (C) Current Assets/Current Answer Answer: B
Liabilities 11. Current Assets do not include:
 (D) Liquid Assets/Current Liabilities  (A) Prepaid Expenses
Answer Answer: C  (B) Inventory
4. Liquid Assets do not include:  (C) Goodwill
 (A) Bills Receivable  (D) Bills Receivable
 (B) Debtors Answer Answer: C
 (C) Inventory 12. Quick Ratio is also known as:
 (D) Bank Balance  (A) Liquid Ratio
Answer Answer: C  (B) Current Ratio
5. Ideal Current Ratio is:  (C) Working Capital Ratio
 (A) 1: 1  (D) None of the Above
 (B) 1: 2 Answer Answer: A
 (C) 1: 3 13. Liquid Assets include:
 (D) 2: 1  (A) Debtors
Answer Answer: D  (B) Bills Receivable
6. Working Capital is the:  (C) Bank Balance
 (A) Cash and Bank Balance  (D) All of the Above
 (B) Capital borrowed from the Answer Answer: D
Banks 14. Liquid Ratio is equal to liquid
 (C) Difference between Current assets divided by:
Assets and Current Liabilities  (A) Non-Current Liabilities
 (D) Difference between Current  (B) Current Liabilities
Assets and Fixed Assets  (C) Total Liabilities
Answer Answer: C  (D) Contingent Liabilities
7. Current assets include only those Answer Answer: B
assets which are expected to be 15. Patents and Copyrights fall under
realised within the category of:
 (A) Current Assets
 (A) 3 months  (B) Liquid Assets
 (B) 6 months  (C) Intangible Assets
 (C) 1 year  (D) None of Above
Answer Answer: C 21. Which of the following
16. Cash Balance ₹15,000; Trade transactions will improve the quick
Receivables ₹35,000; Inventory ratio?
₹40,000; Trade Payables ₹24,000 and  (A) Sale of goods for cash
Bank Overdraft is ₹6,000. Current  (B) Sale of goods on credit
Ratio will  (C) Issue of new shares for cash
be:  (D) All of the Above
Answer Answer: D
 (A) 3.75: 1 22. A company’s Current Ratio is 2:
 (B) 3: 1 1. After cash payment to some of its
 (C) 1: 3 creditors, Current Ratio will:
 (D) 1: 3.75  (A) Decrease
Answer Answer: B
 (B) Increase
17. Trade Receivables?40,000; Trade  (C) As before
Payables ₹60,000; Prepaid Expenses  (D) None of these
₹10,000; Inventory ₹1,00,000 and
Answer Answer: B
Goodwill is ₹15,000. Current Ratio 23. A Company’s Current Assets are
will be: ₹8,00,000 and its current liabilities
 (A) 1: 2 are ₹4,00,000. Subsequently, it
 (B) 2: 1 purchased goods for ₹1,00,000 on
 (C) 2.33: 1 credit. Current ratio will be
 (D) 2.5: 1  (A) 2: 1
Answer  (B) 2.25: 1
 (C) 1.8: 1
Answer: D
 (D) 1.6: 1
18. Cash Balance ₹5,000; Trade Answer Answer: C
Payables ₹40,000; Inventory ₹50,000; 24, A company’s Current assets are ₹3,00,000 and its current
Trade Receivables ₹65,000 and liabilities are ₹2,00,000. Subsequently, it paid ₹50,000 to its trade
Prepaid Expenses are ₹10,000. Liquid payables. Current ratio will be
Ratio will be  (A) 2: 1
 (A) 1.75: 1  (B) 1.67: 1
 (B) 2: 1  (C) 1.25: 1
 (C) 3.25: 1  (D) 1.5: 1
 (D) 3: 1 Answer Answer: B

Answer Answer: A 25. Current Assets of a Company

19. Current Assets ₹4,00,000; were? 1,00,000 and its current ratio
Current Liabilities ₹2,00,000 and was 2: 1. After this the company paid?
Inventory is ₹50,000. Liquid Ratio will 25,000 to a Trade Payable. The
be: Current Ratio after the payment
 (A) 2: 1 will be:
 (B) 2.25: 1
 (A) 5: 1
 (C) 4: 7
 (B) 2: 1
 (D) 1.75: 1
 (C) 3: 1
Answer Answer: D
 (D) 4: 1
20. Which of the following
Answer Answer: C
transactions will improve the Current
26. Current liabilities of a company
Ratio?
were ₹2,00,000 and its current ratio
 (A) Cash Collected from Trade
was 2.5: 1. After this the company
Receivables
paid ₹1,00,000 to a trade payable.
 (B) Purchase of goods for cash
The current ratio after the payment
 (C) Payment to Trade Payables
will be:
 (D) Credit purchase of Goods
Answer Answer: C  (A) 2: 1
 (B) 4: 1  (A) increase liquid ratio
 (C) 5: 1  (B) decrease liquid ratio
 (D) None of the above  (C) have no effect on liquid ratio
Answer Answer: B  (D) increase gross profit ratio
27. A Company’s liquid assets are Answer Answer: C
₹10,00,000 and its current liabilities 33. Liquid Assets:
are ₹8,00,000.
 (A) Current Assets – Prepaid Lap.
Subsequently, it purchased goods for  (B) Current Assets – Inventory +
₹1,00,000 on credit. Quick ratio will Prepaid Exp.
be  (C) Current Assets – Inventory –
Prepaid Exp.
 (A) 1.11: 1  (D) Current Assets + Inventory –
 (B) 1.22: 1 Prepaid Exp.
 (C) 1.38: 1
Answer Answer: C
 (D) 1.25: 1 34. Current Assets ₹85,000; Inventory
Answer Answer: A
₹22,000; Prepaid Expenses ₹3,000.
28. A Company’s liquid assets are Then liquid assets will be:
₹5,00,000 and its current liabilities  (A) ₹63,000
are ₹3,00,000. Thereafter, it paid
(B) ₹60,000 (C) ₹82,000 (D) ₹1,10,000
1,00,000 to its trade payables. Quick
Answer Answer: B
ratio will be: 35. A Company’s Quick Ratio is 1.5:
 (A) 1.33: 1 1; Current Liabilities are ₹2,00,000
 (B) 2.5: 1 and Inventory is ₹1,80,000. Current
 (C) 1.67: 1 Ratio will be:
 (D) 2: 1
Answer Answer: D (A) 0.9: 1 (B) 1.9: 1 (C) 1.4: 1 (D) 2.4: 1
29. The is a measure of liquidity Answer Answer: D
which excludes generally the least 36. A Company’s Quick Ratio is 1.8:
liquid asset. 1; Liquid Assets are ₹5,40,000 and
 (A) Current ratio, Accounts Inventory is ₹1,50,000. Its Current
receivable Ratio will be:
 (B) Liquid ratio, Accounts receivable
 (C) Current ratio, inventory (A) 2: 1 (B) 2.3: 1 (C) 1.8: 1 (D) 1.3: 1

 (D) Liquid ratio, inventory Answer Answer: B

37. A Company’s Current Ratio is 2.8:
Answer Answer: D
30. Assuming that the current ratio 1; Current Liabilities are ₹2,00,000;
is 2: 1, purchase of goods on credit Inventory is
would: ₹1,50,000 and Prepaid Expenses are ₹10,000. Its Liquid Ratio will
 (A) Increase Current ratio be: (A) 3.6: 1 (B) 2.1: 1 (C) 2: 1 (D) 2.05: 1
 (B) Decrease Current ratio Answer Answer: C
 (C) have no effect on Current ratio 38. A Company’s Current Ratio is 3:
 (D) decrease gross profit ratio 1; Current Liabilities are ₹2,50,000;
Answer Answer: B Inventory is ₹60,000 and Prepaid
31. Assuming that the current ratio is Expenses are ₹5,000. Its Liquid
2: 1, Cash paid against Bills Payable Assets will be:
would:
 (A) increase current ratio  (A) ₹6,90,000
 (B) Decrease Current ratio  (B) ₹6,95,000
 (C) have no effect on Current ratio  (C) ₹6,85,000
 (D) decrease gross profit ratio  (D) ₹8,15,000
Answer Answer: C
Answer Answer: A
32. Assuming liquid ratio of 1.2: 1, 39. On the basis of following data, the
cash collected from debtors would: liquid ratio of a company will be:
Current Ratio 5: 3; Current Liabilities its Liquid Ratio is 1.5, what will be the
₹75,000 and Inventory ₹25,000 value of Inventory?
 (A) 1: 1  (A) ₹6,00,000
 (B) 2:1.8  (B) ₹2,00,000
 (C) 3: 2  (C) ₹3,60,000
 (D) 4: 3  (D) ₹6,40,000
Answer Answer: D Answer Answer: C
40. Current ratio of a firm is 9: 4. Its 47. A Company’s Current Ratio is 2.5:
current liabilities are ₹1,20,000. 1 and its Working Capital is ₹60,000.
Inventory is ₹30,000. Its liquid ratio If its Inventory is ₹52,000, what will
will be: be the liquid Ratio?
 (A) 1: 1  (A) 2.3: 1
 (B) 1.5: 1  (B) 2.8: 1
 (C) 2: 1  (C) 1.3: 1
 (D) 1.6: 1  (D) 1.2: 1
Answer Answer: C Answer Answer: D
41. A firm’s current ratio is 3.5: 2. Its 48. If a Company’s Current Liabilities
current liabilities are?80,000. Its are ₹80,000; Working Capital is
working capital will be: ₹2,40,000 and Inventory is ₹40,000,
 (A) ₹1,20,000 its quick ratio will be:
 (B) ₹1,60,000
 (A) 3.5: 1
Answer Answer: C
42. A Company’s Current Ratio is 3: 1  (B) 4: 1
and Liquid Ratio is 1.2: 1. If its Answer Answer: A

Current Liabilities are ₹2,00,000, 49. A Company’s Liquid Assets are

what will be the value of Inventory? ₹2,00,000, Inventory is ₹1,00,000,
Prepaid Expenses are ₹20,000 and
(A) ₹2,40,000 (B) ₹3,60,000 (C) ₹4,00,000 (D) ₹40,000 Working Capital is ₹2,40,000. Its
Answer Answer: B Current Ratio will be:
43. A Company’ s Current Ratio is
2.5: 1 and Liquid Ratio is 1.6: 1. If its  (A) 1.33: 1
Current Assets are ₹7,50,000, what  (B) 4: 1
will be the value of Inventory?  (C) 2.5: 1
 (D) 3: 1
(A) ₹4,50,000 (B) ₹4,80,000 (C) ₹2,70,000 (D) ₹1,80,000 Answer Answer: B

Answer Answer: C (B) Solvency Ratios

44. Current Ratio of a Company is 50. Long term solvency is indicated
2.5: 1. If its working capital is by:
₹60,000, its current liabilities will be:
 (A) Current Ratio
(A) ₹40,000 (B) ₹60,000 (C) ₹1,00,000 (D) ₹24,000  (B) Quick Ratio
Answer Answer: A  (C) Net Profit Ratio
45. A Company’s Current Assets are  (D) Debt/Equity Ratio
₹6,00,000 and working capital is Answer Answer: D
₹2,00,000. Its Current Ratio will be: 51. Debt Equity Ratio is:
 (A) Liquidity Ratio
 (A) 3: 1  (B) Solvency Ratios
 (B) 1.5: 1  (C) Activity Ratio
 (C) 2: 1  (D) Operating Ratio
 (D) 4: 1
Answer Answer: B
Answer Answer: B
52. Debt Equity Ratio is:
46. A Company’s Current Ratio is 2.4:  (A) Long Term Debts/Shareholder’s
1 and Working Capital is ₹5,60,000. If Funds
 (B) Short Term Debts/Equity 58. Proprietary Ratio indicates the
Capital relationship between Proprietor’s
 (C) Total Assets/Long term Debts Funds ds and
 (D) Shareholder’s Funds/Total  (A) Long-Term Debts
Assets  (B) Short Term & Long-Term Debts
Answer Answer: A  (C) Total Assets
 53. Proprietary Ratio is:  (D) Debentures
 (A) Long term Debts/Shareholder’s Answer Answer: C
Funds
 (B) Total Assets/Shareholder’s
Funds
 (C) Shareholder’s Funds/Total
Assets Answer Answer: D

 (D) Shareholder’s Funds/Fixed 60. Equity Share Capital ₹20,00,000;

Assets Reserve 5,00,000; Debentures
Answer Answer: C ₹10,00,000; Current Liabilities
54. Fixed Assets ₹5,00,000; Current ₹8,00,000. Debt-equity ratio will be:
Assets ₹3,00,000; Equity Share  (A) .4; 1
Capital ₹4,00,000; Reserve ₹2,00,000;  (B) .32: 1
Long-term Debts ₹40,000. Proprietary  (C) .72: 1
Ratio will be:  (D) .5: 1
Answer
 (A) 75%
 (B) 80% Answer: A
 (C) 125%
61. Debt equity ratio of a company is
 (D) 133%
1: 2. Which of the following
Answer Answer: A
transactions will increase it:
 55. The …………. ratios provide the
 (A) Issue of new shares for cash
information critical to the long run
 (B) Redemption of Debentures
operation of the firm.
 (C) Issue of Debentures for cash
 (A) Liquidity
 (D) Goods purchased on credit
 (B) Activity
Answer Answer: C
 (C) Solvency
62. Satisfactory ratio between Long-
 (D) Profitability
term Debts and Shareholder’s Funds
Answer Answer: C
is:
 56. If Debt equity ratio exceeds, it
indicates risky financial position.  (A) 1: 1
 (A) 1: 1  (B) 3: 1
 (B) 2: 1  (C) 1: 2
 (C) 1: 2  (D) 2: 1
 (D) 3: 1 Answer Answer: D
Answer Answer: B Equity Share Capital ₹5,00,000;
 57. In debt equity ratio, debt refers General Reserve ₹3,20,000;
to: Preliminary Expenses ₹20,000; 63.
 (A) Short Term Debts On the basis of following data, the
 (B) Long Term Debts Debt-Equity Ratio of a Company will
 (C) Total Debts be:
 (D) Debentures and Current Debentures ₹3,20,000; Current
Liabilities Liabilities ₹80,000.
Answer
 (A) 1: 2
Answer: B  (B) 52: 1
 (C) 4: 1
 (D) 37: 1
Answer Answer: C 68. On the basis of following
 64. On the basis of following information received from a firm, its
information received from a firm, its Total Assets-Debt Ratio will be :
Debt-Equity Ratio will be: Equity Working Capital ₹3,20,000; Current
Share Capital ₹5,80,000; Reserve Liabilities ₹1,40,000; Fixed Assets
Fund ₹4,30,000; Preliminary ₹2,60,000; Debentures ₹2,10,000;
Expenses ₹40,000; Long term Debts Long Term Bank Debt ₹78,000.
₹1,28,900; Debentures ₹2,30,000.
 (A) 42: 1  (A) 40%
 (B) 53: 1  (B) 60%
 (C) 63: 1  (C) 30%
 (D) 37: 1  (D) 70%
Answer Answer: A
Answer Answer: D
65. On the basis of following data, (C) Activity Ratios
the proprietary ratio of a Company 69. Inventory Turnover Ratio is:
will be: Equity Share Capital  (A) Average Inventory/Revenue from
₹6,00,000; Debentures ₹2,40,000; Operations
Statement of Profit & Loss Debit  (B) Average Inventory/Cost of
Balance ₹40,000. Revenue from Operations
 (A) 74%  (C) Cost of Revenue from
 (B) 65% Operations/Average Inventory
 (C) 82%  (D) G.P./Average Inventory
 (D) 70% Answer
Answer Answer: D Answer: C
66. On the basis of following
information received from a firm, its 70. Opening Inventory ₹1,00,000;
Proprietary Ratio will be: Fixed Closing Inventory ₹1,50,000;
Assets ?3,30,000; Current Assets Purchases ₹6,00,000; Carriage
₹1,90,000; Preliminary Expenses ₹25,000; Wages ₹2,00,000. Inventory
₹30,000; Equity Share Capital Turnover Ratio will be:
₹2,44,000; Preference Share Capital  (A) 6.6 Times
₹1,70,000; Reserve Fund ₹58,000.  (B) 7.4 Times
 (A) 70%  (C) 7 Times
 (B) 80%  (D) 6.2 Times
 (C) 85% Answer Answer: D

 (D) 90% 71. Revenue from Operations

Answer Answer: C
₹8,00,000; Gross Profit Ratio 25%;
67. On the basis of following data, a Opening Inventory ₹1,00,000; Closing
Company’s Total Assets-Debt Ratio Inventory ₹60,000. Inventory
will be: Working Capital ₹2,70,000; Turnover Ratio will be:
Current Liabilities ₹30,000; Fixed  (A) 10 Times
Assets ₹4,00,000; Debentures  (B) 7.5 Times
₹2,00,000; Long Term Bank Loan  (C) 8 Times
₹80,000.  (D) 12.5 Times
 (A) 37% Answer Answer: B

 (B) 40% 72. On the basis of following data,

 (C) 45% the cost of revenue from operations by
 (D) 70% a company will be: Opening Inventory
Hint: Working Capital + Current ₹70,000; Closing Inventory? ₹80,000;
Liabilities = Current Assets Inventory Turnover Ratio 6 Times.
 (A) ₹1,50,000
Answer Answer: B  (B) ₹90,000
 (C) ₹4,50,000
 (D) ₹4,80,000
Answer Answer: C 78. Opening Inventory ₹50,000;
73. Opening Inventory of a firm is Closing Inventory ₹40,000 and cost of
₹80,000. Cost of revenue from revenue from operations ₹7,20,000.
operations is ?6,00,000. What will be Inventory Turnover
Inventory Turnover Ratio is 5 times. Ratio?
Its closing Inventory will be:  (A) 18 Times
 (B) 16 Times
 (A) ₹1,60,000  (C) 14.4 Times
 (B) ₹1,20,000  (D) 8 Times
 (C) ₹80,000
Answer Answer: B
 (D) ₹2,00,000 79. Average Inventory ₹60,000;
Answer Answer: A
Inventory Turnover Ratio 8; Gross
74. Cost of revenue from operations Profit 20% on revenue from
₹6,00,000; Inventory Turnover Ratio operations; what will be Gross Profit?
5; Find out the value of opening  (A) ₹1,20,000
inventory, if opening inventory is  (B) ₹96,000
₹8,000 less than” the closing  (C) ₹80,000
inventory.  (D) ₹15,000
 (A) ₹1,12,000
Answer Answer: A
 (B) ₹1,16,000 80. Opening Inventory ₹75,0000;
 (C) ₹1,28,000 Closing Inventory ₹1,05,000;
 (D) ₹1,24,000 Inventory Turnover Ratio 6; Gross
Answer: B Profit 20% on cost; what will be Gross
 75. Revenue from Operations Profit?
₹2,00,000; Inventory Turnover Ratio (A) ₹1,35,000 (B) ₹1,08,000 (C) ₹90,000 (D) ₹18,000

5; Gross Profit 25%. Find out the Answer Answer: B

value of Closing In venturi, if Closing 81. Opening Inventory ₹40,0000;

Inventory is ₹8,000 more than the Purchase ₹4,00,000; Purchase Return
Opening Inventory. ₹112,000, what will be Inventory
 (A) ₹38,000 turnover ratio if Closing Inventory is
 (B) ₹22,000 less than Opening Inventory by
 (C) ₹34,000 ₹8,000?
 (D) ₹26,000 (A) 9 Times (B) 10.78 Times (C) 11 Times (D) 8.82 Times

Answer Answer: C Answer Answer: C

76. If the inventory turnover ratio is

divided into 365, it becomes a
measure of
 (A) Sales efficiency
 (B) Average Age of Inventory
 (C) Sales Turnover
 (D) Average Collection Period
Answer Answer Answer: C
83. Total revenue from operations
Answer: B
₹9,00,000; Cash revenue from
77. If average inventory is ₹50,000 operations ₹3,00,000; Debtors
and closing inventory is ₹2,000 less ₹1,00,000; B/R ₹20,000. Trade
than the opening inventory, opening Receivables Turnover Ratio will be:
and closing inventory will be:  (A) 5 Times
 (A) ₹52,000 and ₹50,000  (B) 6 Times
 (B) ₹50,000 and ₹48,000  (C) 7.5 Times
 (C) ₹48,000 and ₹46,000  (D) 9 Times
 (D) ₹51,000 and ₹49,000 Answer Answer: A

Answer Answer: D
84. Total revenue from operations  (D) 46 Days
₹27,00,000; Credit revenue from Answer Answer: B
operations ₹18,00,000; Opening 89. Credit revenue from operations
Debtors ₹3,20,000; Closing Debtors ₹6,00,000; Cash revenue from
₹4,00,000; Provision for Doubtful operations? 1,50,000; Debtors
Debts ₹60,000. Trade Receivables ₹1,00,000; B/R ₹50,000. Average
Turnover Ratio will be: Collection Period will be:
 (A) 7.5 times
 (B) 9 times  (A) 2 Months
 (C) 6 times  (B) 2.4 Months
 (D) 5 times  (C) 3 Months
 (D) 1.6 Months
Answer Answer: D
85. Credit revenue from operations Answer Answer: C

₹24,00,000; Trade Receivables 90. On the basis of following data, a Company’s closing debtors

will be: Credit revenue from operations ₹9,00,000; Average

Turnover Ratio 6 times; Opening
Collection period 2 debtors are ₹15,000 less as compared to
Debtors ₹3,20,000. Closing Debtors
will be: closing debtors. months; Opening

(A) ₹1,42,500 (B) ₹1,57,500 (C) ₹1,80,000 (D) ₹75,000

 (A) ₹4,00,000
 (B) ₹4,80,000 Answer Answer: B

 (C) ₹80,000 91. Total credit revenue from

 (D) ₹7,20,000 operations of a firm is ₹5,40,000.
Average collection period is 3 months.
Answer Answer: B
86. A firm makes credit revenue from Opening debtors are ₹1,10,000. Its
operations of ₹2,40,000 during the closing debtors will be:
(A) ₹1,35,000 (B) ₹1,60,000 (C) ₹2,20,000 (D) ₹1,80,000
year. If the trade receivables turnover
ratio is 8 times, calculate closing Answer Answer: B

debtors, if the closing debtors are 92. The formula for calculating Trade
more by ₹6,000 than the opening Payables Turnover Ratio is:
debtors:
 (A) ₹33,000
 (B) ₹36,000
 (C) ₹24,000
 (D) ₹27,000
Answer Answer: A
87. Credit revenue from operations
₹3,00,000. Trade Receivables Answer Answer: B

Turnover Ratio 5; Calculate Closing 93. Credit Purchases ₹12,00,000;

Debtors, if closing debtors are two Opening Creditors ₹2,00,000; Closing
times in comparison to Opening Creditors ₹1,00,000.
Debtors. Trade Payables Turnover Ratio will be:

 (A) ₹40,000  (A) 6 times

 (B) ₹60,000  (B) 4 times
 (C) ₹ 80,000  (C) 8 times
 (D) ₹1,20,000  (D) 12 times
Answer Answer: C
Answer Answer: C
88. Credit revenue from operations 94. Total Purchases ₹4,50,000; Cash
₹5,60,000; Debtors ₹70,000; B/R Purchases ₹1,50,000; Creditors
₹10,000. Average Collection Period ₹50,000; Bills Payable ₹10,000. Trade
will be: Payables Turnover Ratio will be:
 (A) 7.5 times
 (A) 52 Days  (B) 6 times
 (B) 53 Days  (C) 9 times
 (C) 45 Days  (D) 5 times
Answer Answer: D Purchases ₹20,00,000; Wages
95. Credit Purchases ₹6,00,000; ₹2,40,000; Carriage Inwards
Trade Payables Turnover Ratio 5; ₹1,50,000; Selling Exp. ₹60,000;
Calculate closing creditors, if closing Revenue from Operations ₹30,00,000.
creditors are? 10,000 less than Gross Profit ratio will be:
opening creditors.  (A) 29%
 (A) ₹1,15,000  (B) 26%
 (B) ₹1,25,000  (C) 19%
 (C) ₹1,30,000  (D) 21%
 (D) ₹1,10,000 Answer Answer: D

Answer Answer: A 101. Cash Revenue from Operations

96. Credit Purchases ₹9,60,000; ₹4,00,000 Credit Revenue, from
Cash Purchases ₹6,40,000; Creditors Operations ₹21,00,000; Revenue from
₹2,40,000; Bills Payable ₹80,000. Operations Return ₹1,00,000; Cost of
Average Payment Period will be: revenue from operations ₹19,20,000.
 (A) 3 months G.P. ratio will be
 (B) 4 months  (A) 4%
 (C) 2.4 months  (B) 23.2%
 (D) 6 months  (C) 80%
Answer Answer: B  (D) 20%
97. Current Assets ₹5,00,000; Answer: D
Current Liabilities ₹1,00,000; 102. A film’s credit revenue from
Revenue from Operations ₹28,00,000. operations is ₹3,60,000, cash revenue
Working Capital turnover Ratio will from operations is ₹70,000, Cost of
be: reverse from operations is ₹3,61,200,
Its gross profit ratio will be:
 (A) 7 times  (A) 11%.
 (B) 5.6 times  (B) 23.2%
 (C) 8 times  (C) 18%
 (D) 10 times  (D) 20%
Answer: A
Answer Answer: D
98. On the basis of following data, the
On the basis of following data, a Company’s Gross Profit Ratio will
Waiting Capital Turnover Ratio of a
be: Net Profit ₹40,000; Office Expenses ₹20,000; Selling Expenses
company will be: Liquid Assets 103.
₹36,000; Total revenue from operations ₹6,00,000.
₹3,70,000; Inventory ₹80,000;  (A) 16%
Current Liabilities ₹1,50,000; Cost of  (B) 20%
revenue from operations ₹7,50,000.  (C) 6.67%
 (A) 2.5 Times  (D) 12.5%
 (B) 3 Trims
Answer Answer: A
 (C) 5 Times 104. What will be the amount of Gross
 (D) 3.8 Times Profit. if revenue from operations is
Answer Answer: A
₹6,00,000 and Gross. Profit Ratio is
99. A firm’s went assets are 20% of cost?
₹3,60,000; Cur from operations is
₹12,00,000. Its work  (A) ₹1,50,000
 (B) ₹1,00,000
 (A) 3 Times  (C) ₹1,20,000
 (B) 5 Times  (D) ₹5,00,000
 (C) 8 Times
Answer Answer: B
 (D) 4 Times 105. What will be the amount of Gross
Answer Answer: B
Profit, if revenue from operations is
(D) Profitability Ratios ₹6,00,000 and Gross Profit Ratio 20%
100. Opening Inventory ₹1,00,000; of revenue from operations?
Closing Inventory ₹1,20,000;
 (A) ₹1,50,000 ₹1,40,000; Closing Inventory ₹80,000;
 (B) ₹1,00,000 Revenue from Operations ₹12,00,000.
 (C) ₹1,20,000 Calculate operating ratio
 (D) ₹5,00,000  (A) 60%
Answer Answer: C  (B) 75%
106. Revenue from operations is (C) 70% (D) 65%
₹1,80,000; Rate of Gross Profit is 25% Answer: B
on cost. What will be the Gross Profit?
111. Revenue from Operations
 (A) ₹45,000 ₹6,00,000; Gross Profit 20%; Office
 (B) ₹36,000 Expenses ₹30,000; Selling Expenses?
 (C) ₹40,000 ₹48,000. Calculate operating ratio (A)
 (D) ₹60,000 80%
Answer Answer: B
107. Operating ratio is: (B) 85% (C) 96.33% (D) 93%
 (A) Cost of revenue from operations Answer Answer: D
+ Selling Expenses/Net revenue from
operations 112. Which of the following is not
 (B) Cost of production + Operating
operating expenses?
Expenses/Net revenue from
operations (A) Office Expenses
 (C) Cost of revenue from operations
+ Operating Expenses/Net Revenue (B) Selling Expenses
from Operations
(C) Bad Debts
 (D) Cost of Production/Net revenue
from operations. (D) Loss by Fire
Answer Answer: C
Answer Answer: D
108. Cost of Revenue from
Operations =
 (A) Revenue from Operations – Net
Profit
 (B) Revenue from Operations –
Gross Profit
 (C) Revenue from Operations –
Closing Inventory
 (D) Purchases – Closing Inventory
Answer Answer: B

109. Total Revenue from Operations

₹15,00,000; Cost of Revenue from
Operations ₹9,00,000 and Operating
Expenses ₹2,25,000. Calculate
operating ratio:
 (A) 75%
 (B) 25%
 (C) 60%
 (D) 15%
Answer Answer: A

110. Purchases ₹7,20,000; Office

Expenses ₹30,000; Selling Expenses
₹90,000; Opening Inventory