 # ACCOUNTANCY FOR CLASS 12 CHAPTER 10 ACCOUNTING RATIOS, MCQS ALONG WITH THE ANSWERS

Free Accountancy Multiple Choice Questions for Class 12 CBSE along with the answers Chapter 10: Accounting Ratios. Accountancy MCQs for Class 12 chapter-wise with the answers are prepared based on the current exam pattern. Students will be able to tackle the MCQs with these answers to realise their spadework level.

1. What does the creditors turnover ratio take into account?

(a) Total credit purchases

(b) Total credit sales

(c) Total cash sales

(d) Total cash purchases

2. Profitability ratio is generally shown in ______.

(a) Simple ratio

(b) Percentage

(c) Times

(d) None of the above

3. Current Ratio =

(a) Current assets/Current liabilities

(b) Liquid assets/Current liabilities

(c) Liquid assets/Current assets

(d) Fixed assets/Current assets

4. The two basic measures of liquidity are _______.

(a) Inventory turnover and current ratio

(b) Current ratio and liquid ratio

(c) Current ratio and average collection period

(d) Current ratio and debtors turnover ratio

Answer: (b) Current ratio and liquid ratio

5. _______ is also known as a liquid ratio.

(a) Current ratio

(b) Quick ratio

(c) Capital ratio

(d) None of the above

6. Which of the following transactions will improve the current ratio?

(a) Purchase of goods for cash

(c) Payment of creditors

(d) Credit purchase of goods

7. The formula for finding out the debt-equity ratio is______.

(a) Long-term debts/Shareholders’ funds

(b) Debentures/Equity capital

(c) Net profit/Total capital

(d) None of the above

8. To test the liquidity of concern, which of the following ratios is useful?

(a) Capital turnover ratio

(b) Acid test ratio

(c) Stock turnover ratio

(d) Net profit ratio

9. Which of the following is included in ‘Current Assets’?

(a) Long-term investment

(b) Short-term investment

(c) Furniture

(d) Preliminary expenses

10. Which of the following assets is not taken into consideration in calculating the acid-test ratio?

(a) Cash

(b) Bills receivable

(c) Stock

(d) None of the above