Profitablility Ratio

Q.

The _________ ratios are primarily measures of returns.

1. liquidity

2. profitability

3. debt

4. activity

Q.

What are the 5 major categories of ratios?

Q.

The ultimate aim of any business is to ______________

1. reduce liabilities

2. none of these

3. generate profits

4. increase share capital

Q.

________________ = operating profits + non-operating income - non-operating expenses

1. Average Profit

2. Gross Profit

3. Net Profit

4. None of these

Q.

Operating cost is equal to the ____________

1. None of these

2. cost of goods sold + other operating expenses

3. cost of goods sold - other operating income

4. cost of goods sold + other operating expenses - other operating income

Q. Which of the following is the best explanation of the relevance of equivalent production units in process costing?

1. A means of equalizing production charged into stock each period
2. The conversion of partly completed units into an equivalent number of completed units in order that costs may be shared on an equitable basis
3. The expression of losses in terms of an equivalent number of units of good production in order that their value may be calculated.
4. A means by which the output achieved may be compared with the equivalent quantity budgeted for the period under review.

Q. Cost of Goods Sold is equal to ________________.

1. Gross profit- Sales
2. Gross profit - operating profit
3. Operating cost - operating expenses
4. Sales - operating profit

Q. An equivalent unit of material or conversion cost is equal to __________.

1. the amount of material or conversion cost necessary to complete one unit of production.
2. a unit of work in process inventory.
3. fifty per cent of the material or conversion cost of a unit of finished goods inventory (assuming a linear production pattern
4. the amount of material or conversion cost necessary to start a unit of production into work in process inventory.

Q. _________ cost refers to the cost which have already been incurred and cannot be altered by any decision in the future.

1. Opportunity cost
2. Sunk cost
3. Incremental cost
4. Decremental cost

Q. Total Labour Cost Variance = _____________________.

1. Standard Cost of Labour $-$ Actual Cost of Labour
2. Standard Rate (Standard Time for Actual Output $-$ Actual Time Worked)
3. Standard Rate (Standard Time for Actual Output $-$ Actual Time paid for)
4. Actual Time taken (Standard Rate $-$ Actual Rate)

Q. Variable cost per unit ___________________.

1. Remains fixed
2. Fluctuates with volume of production
3. Varies in consideration with the volume of sales
4. None of the above

Q. _____________ = net profit + non operating expenses - non operating incomes.

1. Gross profit
2. Capital profit
3. Net profit
4. Operating Profit

Q. The ultimate aim of any business is to generate profits.

1. True
2. False

Q. Operating Profit = Net Sales - Operating Cost

1. False
2. True

Q. In process cost computations, the cost of ending work in process inventory is calculated on the ____________.

1. quantities schedule
2. computation of equivalent production
3. total Costs to Account For Schedule
4. total Costs Accounted For Schedule

Q. The ________ classification has been on the basis of financial statements to which the determinants of ratios belong.

1. Traditional
2. Functional
3. None of the above
4. Modern

Q. Period costs are charged to __________.

1. Period
2. Cost of production
3. Profit and loss account of that period
4. Products