Changes in Trade Receivables

Q. A, B and C were in partnership sharing profits and losses in the ratio of 4 : 2 : 1 respectively. It was provided that Cs share in profit for a year would not be less then ₹ 7, 500. The profit for the year ended 31st March, 2018 amounted to ₹ 31, 500. You are required to show the appropriation among the partners. The profit and Loss Appropriation Account is not required.

Q. Compute Gross Profit Ratio from the following information:
Cost of Revenue from Operations (Cost of Goods Sold) ₹5, 40, 000; Revenue from Operations (Net Sales) ₹6, 00, 000.

Q. ₹ 1, 75, 000 is the Credit Revenue from Operations, i.e., Net Credit Sales of an enterprise. If Trade Receivables Turnover Ratio is 8 times, calculate Trade Receivables in the Beginning and at the end of the year. Trade Receivables at the end is ₹ 7, 000 more than that in the beginning.

Q. Calculate Inventory Turnover Ratio in each of the following alternative cases:
Case 1: Cash Sales 25% of Credit Sales; Credit Sales ₹3, 00, 000; Gross Profit 20% on Revenue from Operations, i.e., Net Sales; Closing Inventory ₹1, 60, 000; Opening Inventory ₹40, 000.
Case 2: Cash Sales 20% of Total Sales; Credit Sales ₹4, 50, 000; Gross Profit 25% on Cost; Opening Inventory ₹37, 500; Closing Inventory ₹1, 12, 500.

Q.

From the followingReceipt and Payment Account prepare final accounts of a Unity Clubfor the year ended March 31, 2007.
Additional Information:
(a) The Club had 500 members each paying an annual subscription of Rs 150.
(b) On 31.3.2007 salaries outstanding amounted to Rs 1, 200 and salaries paid included Rs 6, 000 for the year 2005−06.
(c) Provide 5% depreciation on Land and Building.

Q.

Which of the following correctly describes the effects of initially recording deferred revenue when cash is received from a customer?

1. Retained earnings increases.

2. Liabilities are not affected.

3. Revenue has increased.

4. Net Income is not affected

Q.

Net Sales + Beginning Accounts Receivables − Closing Accounts Receivables is equal to ___

1. Cash paid to suppliers

2. Cash receipts from customers

3. Cash payments to employees

4. None of these

Q.

Decrease in current assets are ________ under indirect method.

1. Not treated

2. Added

3. Subtracted

4. None of these

Q.

What is the price ceiling and price floor?

Q. All except _________ are shown on debit side of trading and profit and loss a/c.

1. Wages A/c
2. Sales A/c
3. Carriage inward A/c
4. Net purchases

Q.

What Is the Difference Between Capital Expenditure and Revenue Expenditure?

Q. The assets net of current liabilities is working capital.

1. current
2. non-current
3. fixed
4. intangible

Q.

Trade Receivable for 31.3.2018 is Rs.150, 000 and for 31.3.2017 is Rs.122, 000. What is the treatment in the cash flow statement for 31.3.2018

1. Increase in Trade Receivable of 28000 and will be added to Net Profit

2. Decrease in Trade Receivable of 28000 and will be added to Net Profit

3. Decrease in Trade Receivable of 28000 and will be reduced from Net Profit

4. Increase in Trade Receivable of 28000 and will be reduced from Net Profit

Q.

Trade receivables for 31.3.2018 is Rs. 50, 000 and for 31.3.2017 is Rs.62, 000. What is the treatment in the cash flow statement for 31.3.2018 ?

1. Increase in Trade Receivable of 12000 to be added to Net Profit

2. Decrease in Trade Receivable of 12000 to be added to Net Profit

3. Decrease in Trade Receivable of 12000 to be reduced from Net Profit

4. Increase in Trade Receivable of 12000 to be reduced from Net Profit

Q. The excess of current assets over current liabilities is called as ___________.

1. Net tangible worth
2. Net worth
3. Gross working capital
4. Net working capital

Q. The amount by which the value of current assets exceeds the value of current liabilities is ________________.

1. Gross working capital
2. Net working capital
3. Quick ratio
4. Working capital ratio

Q. Sharma Star Company is interested in analysing its current operations. Investigation shows that for each Rs. 100 of sales, variable costs amount to Rs. 70 and fixed costs amount to Rs. 6, 00, 000 per year. How much the company must sell, if it wants to earn 15% profit on its Rs. 10, 00, 000 investment.

1. Rs. 25, 00, 000
2. Rs. 30, 00, 000
3. Rs. 35, 00, 000
4. Rs. 20, 00, 000

Q.

Decrease in current assets are ________ under indirect method.

1. Not treated

2. Added

3. Subtracted

4. None of these

Q. Which of the following is true at break even point?

1. Sales revenue = variable cost
2. Profit = Fixed cost + Variable cost.
3. Sales revenue = Total cost -Variable cost
4. Contribution = Fixed cost