Total Assets to Debt Ratio

Q.

What is the difference between the straight-line method and the diminishing balance method?

Q.

Depreciation value of an asset is equal to

1. Cost + Scrap Value

2. Cost + Market Price

3. Cost – Scrap Value

4. None of the above

Q.

Total Assets to Debt Ratio = _____

1. Total Assets/Long-term Debts

2. Total Assets/Short-term Debts

3. None of these

4. Current Assets/Long-term Debts

Q.

It establishes a relationship between total assets and total long-term debts. This ratio is ____________.

1. Current ratio

2. Total assets to debt ratio

3. Debt equity ratio

4. None of these

Q. The main objective of providing depreciation is to ___________.

1. create secret reserves
2. reduce the book value of assets
3. value the assets properly
4. allocate cost of the assets

Q.

Is Accumulated Depreciation a Fixed Asset?

Q.

This ratio primarily indicates the rate of external funds in financing the assets and the extent of coverage of their debts by the assets. This ratio is ____.

1. Current ratio

2. Debt equity ratio

3. None of these

4. Total assets to debt ratio

Q. Total Assets to Debt Ratio = / Long-term Debts

1. Current Assets
2. Fixed Assets
3. Non-current Assets
4. Total Assets

Q.

It would be a good indicator for a firm if the total assets to debt ratio is ___________.

1. Low

2. average

3. High

4. None of these

Q. Accumulated depreciation needs to be while calculating value of total assets

1. added
2. reduced
3. multiplied
4. divided

Q. If depreciation is not provided it will result into______.

1. Undertatement of asset
2. True position of asset
3. Overstatement of asset
4. No effect on asset

Q. Original cost of asset : 80, 000 scrap value : 10, 000 Life of asset : 10 years
calculate annual depreciation ______.

1. 7000
2. 8000
3. 5000
4. None

Q. The depreciation amount in straight line method remains _____________________ for every year.

1. fixed
2. variable
3. changing
4. none

Q. Depreciation = Cost of asset less scrap value / Estimated working _____ of assets.

1. Life period
2. Hours
3. Days
4. Months

Q. What do you understand by Reducing Balance Method of depreciation?

Q. Depreciation value of an asset is equal to:

1. Cost + Scrap value
2. Cost + Market price
3. Cost - Scrap value
4. None of these

Q.

____________ of total assets to debt ratio indicates that assets have been mainly financed by owners funds and the long-term loans are adequately covered by assets.

1. Lower

2. Higher

3. Equal

4. All of these

Q. Salvage value means ____________.

1. Historical cost less depreciation
2. Estimated disposal value
3. Discounted estimated scrap value
4. Current selling price

Q. Calculate current ratio from the following :
Working capital ?192000
Long term debt ?80000
Total debt ?200000

Q. Question : Explain the determinants of the amount of depreciation.

Q. Which of the following method is applicable in case of wasting assets, i.e., mines, quarries, oil well etc.?

1. Machine hour rate.
2. Inventory system of depreciation.
3. Depletion Method.
4. Sum of years digit.

Q. It would be a good indicator for a firm if the total assets to debt ratio is .

1. high
2. low
3. average
4. zero

Q. The debt ratio refers to the ratio of long-term debt to total external and _________.

1. Mutual funds
2. Internal funds
3. Personal funds
4. None of the above

Q. Under which method of depreciation amount of depreciation changes every year.

Q. The main purpose of depreciation accounting is to _____________.

1. charge the cost of asset
2. allocate the cost of the asset over its estimated useful life
3. provide for replacement of the asset on the expiry of is useful life
4. value the assets on the closing date of the year

Q. Question

Q. Depreciation is a process of ______________.

1. Valuation.
2. Allocation.
3. Reduction.
4. Appreciation.

Q. The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as _______.

1. Appreciation
2. Depreciation
3. Fluctuation
4. None of these

Q. Depreciation is __________ of an asset.

1. All of the above
2. Valuation
3. Allocation
4. Sale value

Q.

calculate debt equity ratio

total assets:2, 30, 000

total debt:1, 50, 000

current liabilities:30, 000