Need for Cash Flow Statement

Q. The current ratio provides a better measure of overall liquidity only when a firm’s inventory cannot easily be converted into cash. If inventory is liquid, the quick ratio is a preferred measure of overall liquidity. Explain.

Q.

Handa Ltd.has inventory of Rs 20, 000. Total liquid assets are Rs 1, 00, 000 and quick ratio is 2:1. Calculate current ratio.

Q. is the blood of business.

1. Debt
2. Equity
3. Cash
4. Assets

Q.

Calculate Current Ratio if:

Inventory is Rs 6, 00, 000; Liquid Assets Rs 24, 00, 000; Quick Ratio 2:1.

Q.

Are Intangible Assets Reported on the Balance Sheet?

Q.

What are the various types of ratios?

Q. The average time between giving the product to the customers and receiving payment is called .

1. turnover ratio
2. cash conversion
3. days receivable
4. days payable

Q. Cash in hand with the petty cashier is shown as....

1. Liabilities
2. Expense
3. Revenue
4. Assets

Q. cycle is a measure of the time delay between a business’ operational activities and the revenue it generates.

1. Turnover
2. Cash conversion
3. Days receivable
4. Days payable

Q. The system of buying at margin means that while buying stocks, people didn't have to pay the .

1. profit amount
2. cost amount
3. full amount
4. risk amount

Q. Stockbrokers sell stocks for .

1. strategy
2. commission
3. loss
4. cash

Q. The immediate solvency ratio is .

1. current ratio
2. quick ratio
3. stock turnover ratio
4. debtor turnover ratio

Q. If actual material cost is 900 units at Rs. 12 per unit and standard material cost is 1000 units at Rs. 11 per unit, then the material price variance is

1. Rs. 900(A)
2. Rs. 1000(A)
3. Rs. 900(F)
4. Rs. 1000(F)

Q. Commission will be shared by -

1. Only Consignee
2. Only Consignor
3. Third Party
4. Consignor & Consignee

Q. In current ratio, current assets are compared with _________.

1. Current profit
2. Current liabilities
3. Fixed assets
4. Equity share capital

Q. The increased economic activity & ample supply of money has increased demand for consumer products.

1. True
2. False

Q. The ratio of cost of goods sold to accounts payable is called .

1. turnover ratio
2. cash conversion
3. days receivable
4. days payable

Q. From the given information, calculate Debtors turnover ratio. Ans- 9.4 times

Reserve from operation : Rs. 3, 00, 000
Closing Stock : Rs. 2, 40, 000
Gross Profit : Rs. 60, 000
Opening Stock : Rs. 58, 000
Debtors : Rs. 32, 000

Q. Realisation from sales is shown in which side of bank account?

1. Debit
2. Credit

Q. Salary payment is shown in which side of bank account?

1. Credit
2. Debit

Q. The great depression is one of the economic disasters.

1. False
2. True

Q.

Explain the importance of Debt equity ratio working capital ratio

Q. A/an crisis in a company means not able to meet its operating expenses.

1. credit
2. asset
3. liquidity
4. operating

Q. Write the word / term / phrase, which can substitute each of the following statements.

Credit balance in Realisation Account.

Q. Which of the following items is not taken into account while computing quick ratio?

1. Bank overdraft
2. Sundry creditors
3. Cash
4. Bank Balance

Q. Explain the steps taken by promoters in the promotion of a company.

Q. The opening balance of the bank is shown in which side of the bank account?

1. Credit
2. Debit

Q. Over-riding commission is a commission payable to consignee by consignor ______________.

1. For protecting himself from bad debt
2. For making sales above specific price
3. As good friend
4. As loyalty payment