Accounting - Questions and Answers for Competitive Exams | GkSeries

25. Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital investment?

1. [A] stock velocity ratio
2. [B] debtors velocity ratio
3. [C] creditors velocity ratio
4. [D] working capital turnover ratio

Answer: Option [A]

26. Which ratio measures the number of times the receivables are rotated in a year in terms of sales?

1. [A] stock turnover ratio
2. [B] debtors turnover ratio
3. [C] creditors velocity ratio
4. [D] working capital turnover ratio

Answer: Option [B]

27. Current assets - current liabilities =

1. [A] fixed capital
2. [B] working capital
3. [C] opening capital
4. [D] closing capital

Answer: Option [B]

28. The ratio establishes the relationship between fixed assets and long-terms funds is

1. [A] current ratio
2. [B] fixed assets ratio
3. [C] fixed assets turnover ratio
4. [D] debt equity ratio

Answer: Option [B]

29. A high capital gearing ratio indicates

1. [A] under capitalization
2. [B] over capitalization
3. [C] borrowed capital
4. [D] long term funds

Answer: Option [A]

30. Low turnover of stock ratio indicates

1. [A] solvency position
2. [B] monopoly situation
3. [C] overinvestment in inventory
4. [D] liquidity position

Answer: Option [C]

31. All those assets which are converted into cash in the normal course of business within one year are known as

1. [A] fixed assets
2. [B] current assets
3. [C] fictitious assets
4. [D] wasting assets

Answer: Option [B]

32. Any transaction between a current account and another current account does not affect

1. [A] profit
2. [B] funds
3. [C] working capital
4. [D] capital

Answer: Option [B]

33. Decrease in current asset

1. [A] increases working capital
2. [B] decreases working capital
3. [C] decrease fixed capital
4. [D] increase fixed capital

Answer: Option [B]

34. Decrease in current liability

1. [A] increases working capital
2. [B] decreases working capital
3. [C] decreases fixed capital
4. [D] ncreases fixed capital

Answer: Option [A]

35. Profit on sale of fixed assets is

1. [A] non trading income
2. [B] operating income
3. [C] non trading gains
4. [D] long term gain

Answer: Option [C]

36. In funds flow statement, funds from operations is

1. [A] application of fund
2. [B] source of cash
3. [C] application of cash
4. [D] source of fund

Answer: Option [D]