ppt

1. Coverage Ratio helps measure a company`s ability to meet its obligations.- true
Profit and Loss Account is a statement of income and expenditure_- for a particular period
Cost of Goods Sold describes both direct and indirect expenses incurred in producing goods for sale-false
The Balance Sheet summarises the profit and loss of a company in a given year.- false
The Asset side of a Balance Sheet- shows the resource utilisation of the company for acquisition of
different assets
Accumulated Depreciation is the total depreciation charged over first three years of an asset.-f
All debts irrespective of their tenure are stated together.-f
Financial Leverage Ratio indicates-SHORT TERM
Expenses towards employee benefits and amenities cannot be accounted under Salaries and
Wages.-F
Book value of equity is- he difference between the book values of assets and liabilities appearing on
the Balance Sheet
Which is NOT true about Equity Share Capital?- In the event of winding up of the company, refund is
not guaranteed.
Accumulated losses can be shown as fictitious asset at the bottom of the Asset Side-TRUE
Administrative expenses do not include-NONE OF ABOVE
Which of the following ratio categories relates stock market information to financial statement
items?-MRKT VALUE RESERVE
Competitive forces on the market have an impact on the level of inventories maintained by a
company.-T
Manufacturing expenses include-stores consumed
Excise duty is not recorded in the Profit and Loss Account.-F
Investments in quoted securities and unquoted securities should be recorded together.-f
Profit and Loss Account is the financial position of a company at a moment in time.-F
Gross Profit is the profit before Interest, Depreciation and Administrative expenses.-T
Patents and trademarks are treated as liquid assets.-F
Selling expenses do not include-FREIGHT
If a company`s Interest Coverage Ratio is 4.0, which of the following statement is true?-NONE

2. Fixed assets are recorded in the books at their cost price-T
The level of inventories maintained by a company does not depend upon-NONE
Pref shar capital enjoy guarantee of div.-F
Which is not true about average collection period.
The income received by a company from sources other than sales of products and services is
mentioned separately.-T
Inventories do not include-SPARES Return on Total Assets is measured after a firm has covered its
operating expenses, interest costs and tax obligations.-T
Average Collection Period is calculated by taking the ratio of the year-end accounts receivable and
average net sales per day-T
Capital Subsidy is a liability.-T
Sales are generally recorded at ----- gross value, including excise duty
Market Value Ratios may relate the market price of a firm`s stock to-balance sheet
Which of the following is desirable?- A low Debt to Equity ratio
Asset Management Ratios indicate the ability of a firm to meet short-term obligations to creditors as
they become due.
-A firm`s inventories on hand are Rs. 2,00,000, its cost of goods sold is Rs. 6,00,000 and its sales are
Rs. 8,00,000. What is the Inventory Turnover Ratio?
-Income is accounted in the year in which it becomes due, even if the payment is to be received next
year.
-Which of the following is a fixed asset?
-Cash profit does not take into account depreciation.
-Fixed assets should be financed from
-Financial Leverage Ratio indicates

3. .