Practice Test/Accountancy

 (S R Patil)

Department of Commerce.

Surprise Test

Date -16/03/2019                                 B.Com III Sem VI                           Total Marks 10

1)________is one of the method of depreciation

a) Written down value b) FIFO    c) LIFO   d) HIFO

2) Net asset = Total Assets  - _______________

a) Total Liabilities b) 3^rd Party Liabilities c) Share Capital  d) Current Assets

3) One of the tax-free incomes from the following

a) Salary b) Interest  c) Agriculture d) Rent 

4) A person who is called “STRATEGY GURU”

 A) Anil Ambani  B)Mukesh  Ambani  C) C.K.Pralhad  D) Michale Porter

5) C R M means  

     a) Customize Relation Management b) Customer Relation Management 

     c) Corporate Relation Management d) None of above

6) Accounting to Banking regulation Act provisions of statutory Reserve is ……..

  a) 10%       b) 20%       c) 30%          d) 40%

7) In the opinion of Philip Kothalar  who is the Entrepreneur

 a) Innovator  b) Traditional c) Researcher  d) Risk taker

8) Minimum ______members are required Co-operative society

    a) 40       b) 30        c) 20             d) 10

9) According to Frank H Night Entrepreneur means____________

a) Takes Risk & decision b) Innovator c) Commercial sense d) Cleverness

10) In a service sector Micro Enterprise is maximum requirements of Investment

 

 

B Com III

 Adv Accounting

Classification of Ratio

A)     Liquidity ratio-

1)        Current Ratio  or  2:1 Ratio  or   Working capital Ratio  :-

      Current Ratio = Current Asset / Current Liabilities

Current Asset = Cash + bank + short term investment + inventory of raw materials, work in progress &finished goods + debtors + bills receivable + prepaid expenses + outstanding income

Current Liabilities = trade creditors + bills payables + bank overdraft + provision for taxation + dividend payable + outstanding expenses + pre-received income + portion of the long term liabilities payable in the year

Standard current ratio is 2:1

2) Quick or Liquid Ratio or Acid Test Ratio or Equal Ratio :-

Quick or Liquid Ratio = Quick or Liquid Asset / Quick or Liquid Liabilities

Quick Asset = Current asset – stock and prepaid expenses

Quick Liabilities = Current liabilities -bank overdraft

The standard Quick Ratio is 1:1 ( Equal )

B)      Activity or Turnover Ratio :-

1)      Inventory or Stock Turnover Ratio :-

 

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

 

Cost of goods sold = opening stock + purchase =expenses on purchase and manufacturing expenses -closing stock

Or

Cost of goods sold = sales – gross profit

2)      Debtors Turnover Ratio or Receivable Turnover Ratio : -      

 

Debtors Turnover Ratio = Debtors + Bills Receivable / Net Sales x 360 or 365

 

Net sales = Sales – sales return

Debtors = Debtors before deducting provision for doubtful debts

 

3)      Fixed Asset Turnover Ratio : -

                          Fixed Asset Ratio  = Net Sales / Fixed Assets

                     Fixed Assets = cost of fixed assets -depreciation

                    Net sales =  Sales – sales return

4)      Current Asset Turnover Ratio : -

 

Current Asset Ratio = Net Sales / Current Asset

 

5)      Total Asset Turnover Ratio : -

                           Total Turnover Ratio = Net Sales / Total Asset

6)      Working Capital Turnover Ratio :-

 

Working capital Turnover Ratio = Net Sales / Working Capital

 

Working capital = Current asset – current liabilities

C)      Leverage or Solvency Ratio : -

 

1)      Debt Equity or Total Liabilities to Proprietors Fund Ratio : -

 

Debt Equity Ratio = Total Debts / Net Worth

                 Or

     = Outside Liabilities / Shareholders Fund

                Or

      = Long Term Liabilities / Shareholders Fund

 

Net worth / shareholders fund = equity share capital + Pref. share capital + reserve and surplus – fictitious assets and losses

 

2)                  Proprietary Ratio or Tangible Net Worth to Total Asset Ratio or Capital to Total Asset Ratio : -

 

Proprietary Ratio = Proprietors fund / Total Asset

 

 

 

 

3)      Capital Gearing Ratio : -

 

Capital Gearing Ratio = Fixed Interest Bearing Securitas  / Equity Share Capital + Reserve &                                                            Surplus  - Fictitious assets

 

Fixed capital bearing securities = Pref. share capital + Debenture + Long Term Loans +Deposits accepted by the concern  

 

4)      Debt to Asset Ratio : -

 

Debts to Asset Ratio = Total Debts / Total Assets

 

Total Debts = Long term Loan + Short term Liabilities

 

5)      Interest Coverage Ratio or Debt to Service Ratio : -

                

                     Interest Coverage Ratio = Profit before Interest and Tax / Total Interest Charges

 

6)      Dividend Coverage Ratio : -

 

Dividend Coverage Ratio = Profit after interest and Tax / Preference Dividend

 

7)      Fixed Charges Coverage Ratio : -

 

Fixed Charges Coverage Ratio = Profit before interest and Tax / Fixed Charges

 

D)     Profitability Ratio : - ( Profitability Ratios based on Sales )

 

1)      Gross Profit Ratio or Gross Margin Ratio : -

 

Gross Profit Ratio = Gross Profit  / Net Sales x  100

 

Net Sales = Total sales – sales return

Gross profit = Net sales – cost of goods sold

2)      Net Profit or Net Margin Ratio : -

 

Net Profit Ratio = Net Profit /Net Sales x 100

 

Net profit = Gross profit – all operating & non operating expenses and taxes

Net sales = Gross profit – sales return

 

3)      Operating Profit Ratio : -

 

Operating Profit ratio = Operating Profit / Net sales x 100

 

Operating profit  = sales -cost of goods sold -operating expenses

                                                         Or

                              = Gross profit – operating expenses

Operating expenses = Office and administrative expenses +selling and distributing expenses      + financial expenses 

 

4)      Operating Ratio : -

 

Operating Ratio = Cost of Goods sold + Operating Expenses / Net Sales x 100

This ratio is opposite to operating profit ratio .

 

 

 

 

 

Profitability Ratio ( on the basis on Investment )  

 

5)      Return on Capital Employed Ratio : -

 

Return on capital employed = Net profit before interest and tax / capital employed x 100

 

Capital employed = eq. share capital + pref. share capital + debenture + long term loan + reserve &  surplus -fictitious assets and losses

                            = working capital + fixed assets

 

6)      Return on shareholders fund or Net Worth or Return on Capital Ratio :-

 

Return on Shareholders Fund  = Net profit after Interest and Tax / Shareholders Fund  x 100  

 

7)      Return on Common Equity or Ordinary shareholders Equity Ratio : -

 

Return on Common Equity = Net profit after Tax and Dividend / Common Equity x 100

 

Common Equity = Eq. share capital + reserve and surplus – fictitious assets and losses

 

8)      Earning par Share : -

 

Earning par shares = Net profit after Tax and Pref. Dividend /Number of Eq. shares

 

9)      Return on Total Assets Ratio : -

Return on Total Assets Ratio = Net profit /Total Assets x 100