MCQ on Indian Railways Administration and Finance An introduction
(Ration Analysis & Management Accounting)-PC-11
1) This ratio refers to the
ability of a firm to meet its short-term obligations out of its short-term
resources
(A)
Liquidity ratio
(B)
Leverage ratios
(C)
Activity ratios
(D)
Profitability ratios
2) The measure of how efficiently its assets resources are employed by a
firm is called
A) Liquidity
ratio
B) Leverage
ratios
C) Activity
ratios
D) Profitability
ratios
3) A current ratio of what and
above indicates the availability of sufficient net working capital and the
ability of the firm to meet its current liabilities?
A) 2:1
B) 1.44:1
C) 1.55:1
D) 1.66:1
4) The
following is also known as External Internal Equity ratio
A) Current
ratio
B) Acid
test ratio
C) Debt
Equity ratio
D) Debt
service coverage ratio
5) A
higher inventory ratio indicates
A) Better
inventory management
B) Quicker
turnover
C) Both ‘A’
and ‘B’
D) None of
the above
6) Return
on Investment Ratio (ROI) =
A) (Gross
profit / Net sales) x 100
B) (Gross
profit x Sales / Fixed assets) x 100
C) (Net
profit / Sales) x 100
D) (Net
profit / Total assets) x 100
7) Liquid
Ratios are also known as
(A) Current Ratio
(B) Acid-test ratio
(C) Cash ratio
(D) None of the above
8) Rule of
thumb for acid-test ratio is
(A) 1:0
(B) 2:1
(C) 1:1
(D) 1:2
9) Gross
capital employed is equal to Total
(A) Assets
(B) Capital
(C) Current Assets
(D) Liabilities
10) Two
elements of a Current ratio are current assets and
(A) Liabilities
(B) Current Liabilities
(C) Total Liabilities
(D) Quick Liabilities
Answer key
Ratio analysis
1A 2C 3A 4C 5C 6D 7B 8C 9A 10B
1) Purchase
of plant will mean
A) Increase
in working capital
B) Decrease
in working capital
C) Both A
& B
D) None of
the above
2)
Calculate the future value of Rs.20,000 invested
now for a period of 5 years at a time preference rate of 8% .
A) Rs.
29,000
B) Rs.
29,380
C) Rs.
29,830
D) Rs.
29,500
3)
If you deposit Rs.10,000 today at 12% rate of
interest, in how many years will this amount grow to Rs. 80,000. Work out by
using the rule of 72.
(A) 18 years
(B) 12 years
(C) 6 years
(D) 8 years
4)
Cash payments to suppliers for goods and
services are classified as cash flows from
A) Investing
Activities
B) Financing
Activities
C) Operating
Activities
D) None of
the above
5) Cash
Flow Statement is based upon
A) Accrual
Accounting
B) Cash
Accounting
C) Double
Entry
D) Book-Keeping
6) Which
of them is a Traditional Method for Capital budgeting decisions?
A) Net
Present Value
B) Internal
Rate of Return
C) Average
Rate of Return
D) Profitability
Index Method.
7) Find
the odd man out:
A) Average
Rate of Return
B) Profitability
Index method
C) Net
Present Value
D) Internal
Rate of Return.
8) All of
the following are the functions of Management Accounting except
A) Decision
making.
B) Measurement
C) Forecasting
D) Ledger
posting.
9) Following
is/are the characteristic(s) of a budget
A) It
outlines projected activities
B) Expressions
are made in quantitative terms
C) It is
for a fixed period
D) All of the
above
10) At breakeven point
A) Total
Expenses = Total Revenue
B) Total
Expenses are less than Total Revenue
C) Total
Expenses are greater than Total Revenue
D) Any of
the above
11) There are various methods to reduce cost of production, except
A) Increase
in production output
B) Reduction
in number of rejections
C) Maintaining
maximum inventory levels
D) Producing
standardized products
12) Under the Profitability Index method, the Decision rule to accept
the proposal:
A) If PI is
less than 1
B) If PI is
more than 1
C) If PI is
equal to “0”
D) If PI is
between 0 and less than 1
13) Capital
investment decisions are generally of this nature
(A) Irreversible
(B) Revenue
(C) Expenditure
(D) None of the above
14) The
following does not take time value of money into consideration
(A) Internal Rate of return Method
(B) Net Present Value Method
(C) Pay-back Method
(D) Profitability Index Method
15) Which of
the Following is true?
(A) Payback
period method measures the true profitability of a project
(B) Internal
rate of return and time adjusted rate of return are the same
(C) Capital
rationing and capital budgeting mean the same thing
(D) Average
Rate of return method takes into account the time value of money
16) The
length of time required to recover the initial cost of a project is called as
(A) Time value of money
(B) Net present Value
(C) Payback Period
(D) Modern Method
17) Fiscal
Means?
(A) Government
Policy
(B) Government
Budget
(C) Both a)
and b)
(D) None of
the above
18) Fiscal
Deficit Means
(A) Assets – Liabilities
(B) Net Liabilities
(C) Total Disbursements - Total Receipts
(D) Net loss made during the year.
19) The
Fiscal Responsibility and Budget Management Act sets target for Government of
India to:
(A) Establish
Financial Discipline
(B) Improve
the Management of Public funds
(C) Reduce
Fiscal Deficits
(D) All of
the above
Answer key
Management accounting
|
1A |
2B |
3A |
4C |
5B |
6C |
7A |
8D |
9D |
10A |
11C |
12B |
|
13A |
14C |
15B |
16C |
17B |
18C |
19D |
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