41. The ratio which determines the profitability from the shareholder’s point of view is .
    1. return on
    2. gross profit
    3. return on shareholders
    4. operating profit ANSWER: C

 

42. Return on equity is also called
    1. . return on
    2. gross profit
    3. return on shareholders
    4. return on net ANSWER: D

 

43. Preliminary expenses is an example of
    1. fixed
    2. current
    3. fictitious
    4. current ANSWER: C

 

44. Prepaid expenses is an example of .
    1. fixed
    2. current
    3. fictitious
    4. current ANSWER: B

 

45. The ratio which is calculated to measure the productivity of total assets is
    1. return on
    2. return on share holders
    3. return on total
    4. return on equity share holders’ ANSWER: C

 

46. The ratio which shows the proportion of profits retained in the business out of the current year’s profits is
    1. . retained earnings
    2. pay out ratio
    3. earnings per
    4. price earnings ANSWER: A

 

 

 

 

47. The ratio which indicates earnings per share reflected by the market price is .
    1. retained earnings
    2. pay out
    3. earnings per
    4. price earnings ANSWER: D

 

48. The ratio establishes the relationship between profit before interest and tax and fixed interest charges is .
    1. interest cover
    2. fixed dividend cover
    3. debt service coverage
    4. dividend yield ANSWER: A

 

49. The ratio shows the preference dividend as a proportion of profit available for shareholders is

                      .

1. interest cover
2. fixed dividend cover
3. debt service coverage
4. dividend yield ANSWER: B

 

50. The dividend is related to the market value of shares in .
    1. interest cover
    2. fixed dividend cover
    3. debt service coverage
    4. dividend yield ANSWER: D

 

51. . Turnover ratio is also known as .
    1. activity
    2. solvency
    3. liquidity
    4. profitability ANSWER: A

 

52. Inventory or stock turnover ratio is also called .
    1. stock velocity
    2. . debtors velocity
    3. . creditors velocity
    4. working capital turnover ANSWER: A

 

53. Which ratio is calculated to ascertain the efficiency of inventory management in terms of capital investment?
    1. stock velocity

 

 

 

1. debtors velocity
2. creditors velocity
3. working capital turnover ANSWER: A

 

54. The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is
    1. stock turnover
    2. debtors velocity
    3. creditors velocity
    4. working capital turnover ANSWER: A

 

55. Sales – Gross Profit = .
    1. net
    2. administrative
    3. cost of
    4. cost of goods sold. ANSWER: D

 

56. Opening stock + purchases + direct expenses – closing stock =                         
    1. net
    2. cost of production
    3. administrative
    4. cost of goods sold. ANSWER: D

 

57. Which ratio measures the number of times the receivables are rotated in a year in terms of sales?
    1. stock turnover
    2. debtors turnover
    3. creditors velocity
    4. working capital turnover ANSWER: B

 

58. Debtors turnover ratio is also called .
    1. stock turnover
    2. debtors velocity
    3. creditors velocity
    4. working capital turnover ratio ANSWER: B

 

59. Creditors turnover ratio is also called .
    1. stock turnover
    2. debtors velocity
    3. . accounts payables
    4. working capital turnover ANSWER: C

 

 

 

60. The indicates the number of times the payables rotate in a year is .
    1. stock turnover
    2. stock turnover
    3. creditors velocity
    4. working capital turnover ANSWER: C

 

61. Funds flow statement is based on the .
    1. working capital concept of
    2. cash concept of
    3. fixed assets concept of
    4. long term ANSWER: A

 

62. All those assets which are converted into cash in the normal course of business within one year are known as .
    1. fixed
    2. current
    3. fictitious
    4. wasting ANSWER: B

 

63. All those liabilities which are payable in cash in the normal course of business within a period of one year are called .
    1. long term
    2.  
    3. short term
    4. current ANSWER: D

 

64. Any transaction between a current account and another current account does not Affect .
    1.  
    2.  
    3. working
    4. ANSWER: B

 

65. Any transaction between a non current account and another non current account does not affect .
    1.  
    2.  
    3. working
    4. ANSWER: B

 

66. Principle’ for preparation of working capital statement -Increase in current asset .
    1. increases working

 

 

 

1. decreases working
2. decrease fixed
3. increase fixed ANSWER: A

 

67. Principle’ for preparation of working capital statement – Decrease in current asset .
    1. increases working
    2. decreases working
    3. decrease fixed
    4. increase fixed ANSWER: B

 

68. Principle’ for preparation of working capital statement -Increase in current liability .
    1. increases working
    2. decreases working
    3. decrease fixed
    4. increase fixed ANSWER: B

 

69. Principle’ for preparation of working capital statement -Decrease in current Liability .
    1. increases working
    2. decreases working
    3. decrease fixed capital
    4. increase fixed ANSWER: A

 

70. Depreciation on fixed assets is .
    1. non operating
    2. operating
    3. operating
    4. non operating ANSWER: D

 

71. Production cost under marginal costing includes .
    1. prime cost only .
    2. prime cost and fixed overhead .
    3. . prime cost and variable
    4. prime cost, variable overhead and fixed ANSWER: C

 

72. One of the primary differences between marginal costing and absorption costing regarding the treatment of .
    1. prime cost .
    2. fixed
    3. variable overheads .
    4. direct ANSWER: B

 

 

 

73. Absorption costing differs from marginal costing is the .
    1. fact that standard costs can be used with absorption costing but not with marginal costing .
    2. amount of costs assigned to individual units of products .
    3. kind of activities for which each can be used .
    4. amount of fixed costs that will be ANSWER: B

 

74. Contribution margin is also known as .
    1. marginal income .
    2. gross
    3. net
    4. net ANSWER: A

 

75. Period costs are .
    1. overhead costs .
    2. prime
    3. variable
    4. fixed ANSWER: D

 

76. Contribution margin is equal to .
    1. fixed cost – loss .
    2. profit + variable cost.
    3. sales — fixed cost- profit .
    4. sales – profit. ANSWER: A

 

77. P/V Ratio is an indicator of .
    1. the rate at which goods are sold .
    2. the volume of sales
    3. the volume of
    4. the rate of ANSWER: D

 

78. Margin of Safety is the difference between .
    1. planned sales and planned profit .
    2. actual sales and break-even
    3. planned sales and actual sales
    4. planned sales and planned ANSWER: B

 

79. An increase in variable costs .
    1. increases p/v ratio .
    2. increases the
    3. reduces contribution .
    4. increase margin of ANSWER: C

 

 

 

 

80. An increase in selling price .
    1. increases the break-even
    2. decreases the break-even
    3. does not affect the break-even
    4. optimize the break even point. ANSWER: B

 

81. A large Margin of Safety indicates .
    1. over
    2. over capitalization .
    3. the soundness of the
    4. under ANSWER: C

 

82. Angie of incidence is .
    1. the angle between the sales line and the total cost
    2. the angle between the sales line and the y-axis.
    3. the angle between the sales line and the x-axis.
    4. the angle between the sales line and the total profit ANSWER: A

 

83. CVP analysis is most important for the determination of .
    1. sales revenue necessary to equal fixed costs .
    2. relationship between revenues and costs at various levels of operations .
    3. variable revenues necessary to equal fixed costs .
    4. volume of operations necessary to Break—even. ANSWER: A

 

84. The conventional Break-even analysis does not assume that .
    1. selling price per unit will remain fixed .
    2. total fixed costs remain the
    3. variable cost per unit will vary .
    4. productivity per worker will remain ANSWER: B

 

85. 1f` fixed costs decrease while variable cost per unit remains constant, the newE.P in relation to the old B.E.P will be .
    1. lower .
    2.  
    3. . unchanged .
    4. ANSWER: B

 

86. If fixed costs decrease while the variable cost per unit remains constant, the new contribution margin in relation to the old contribution margin will be .
    1. lower .
    2. unchanged .

 

 

 

1.  
2. ANSWER: B