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Accounting - Questions and Answers for Competitive Exams | GkSeries

Questions
25. Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital investment?
  • [A] stock velocity ratio
  • [B] debtors velocity ratio
  • [C] creditors velocity ratio
  • [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?
  • [A] stock turnover ratio
  • [B] debtors turnover ratio
  • [C] creditors velocity ratio
  • [D] working capital turnover ratio

Answer: Option [B]

27. Current assets - current liabilities =
  • [A] fixed capital
  • [B] working capital
  • [C] opening capital
  • [D] closing capital

Answer: Option [B]

28. The ratio establishes the relationship between fixed assets and long-terms funds is
  • [A] current ratio
  • [B] fixed assets ratio
  • [C] fixed assets turnover ratio
  • [D] debt equity ratio

Answer: Option [B]

29. A high capital gearing ratio indicates
  • [A] under capitalization
  • [B] over capitalization
  • [C] borrowed capital
  • [D] long term funds

Answer: Option [A]

30. Low turnover of stock ratio indicates
  • [A] solvency position
  • [B] monopoly situation
  • [C] overinvestment in inventory
  • [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
  • [A] fixed assets
  • [B] current assets
  • [C] fictitious assets
  • [D] wasting assets

Answer: Option [B]

32. Any transaction between a current account and another current account does not affect
  • [A] profit
  • [B] funds
  • [C] working capital
  • [D] capital

Answer: Option [B]

33. Decrease in current asset
  • [A] increases working capital
  • [B] decreases working capital
  • [C] decrease fixed capital
  • [D] increase fixed capital

Answer: Option [B]

34. Decrease in current liability
  • [A] increases working capital
  • [B] decreases working capital
  • [C] decreases fixed capital
  • [D] ncreases fixed capital

Answer: Option [A]

35. Profit on sale of fixed assets is
  • [A] non trading income
  • [B] operating income
  • [C] non trading gains
  • [D] long term gain

Answer: Option [C]

36. In funds flow statement, funds from operations is
  • [A] application of fund
  • [B] source of cash
  • [C] application of cash
  • [D] source of fund

Answer: Option [D]

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