The index of efficiency and profitability of the business a) Operating ratio b) Operating profit ratio c) Expense ratio d) Net profit ratio

The index of efficiency and profitability of the business
a) Operating ratio
b) Operating profit ratio
c) Expense ratio
d) Net profit ratio
by

1 Answer

Answer :

b) Operating profit ratio
by

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Last Answer : a) Profitability in relation to investment

Debtors turnover ratio is used to calculate------ a) efficiency b) solvency c) liquidity d) profitability

Description : Debtors turnover ratio is used to calculate------ a) efficiency b) solvency c) liquidity d) profitability

Last Answer : a) efficiency

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Description : When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of ... net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

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When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of projects that adds most to firm value. A. profitability index (PI) B. net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

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Solvency ratio indicates----------------- a) Credit worthiness b) Activity c) Profitability d) None of these

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Debt equity ratio is a-------------------------------------- a) Profitability ratio b) Turnover ratio c) Short term solvency ratio d) Long term solvency ratio

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---------------- ratio studies the firm’s ability to meet its long term financial position a) Liquidity ratio b) Profitability c) Activity d) Leverage

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By computing current ratio ---------------- solvency of a concern is assessed a) Short term b) Long term c) Liquidity d) Profitability

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Current ratio shows----- a) The change in gross profit b) The working capital position c) The liquidity of assets d) The change in net profit

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An example of Balance Sheet ratio is --------------- a) Net profit ratio b) Inventory turn over ratio c) Current ratio d) Fixed asset turn over ratio

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Long term solvency of a firm can be measured by a) Current ratio b) Net profit ratio c) Gross profit ratio d) Debt equity ratio

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The ratio which depicts the relationship between two items,one of which is drawn from the Balance Sheet and the other from the revenue account a) Current ratio b) Equity Ratio c) Net Profit ratio d) Debtors Turn over Ratio

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Debtors turnover ratio measures---------- a) Short term solvency b) Operating efficiency c) Long term solvency d) Credit policy

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Operating ratio establishes the relationship between --------------- and net sales a) Cost of goods sold b) Cost of sales c) Cost of production d) Operating cost

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Closing entries are made a. in order to terminate the business as an operating entity. b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the next accounting period starts. c. in order to transfer net income (or loss) and dividends to the retained earnings account. d. so that financial statements can be prepared.

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The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.

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Last Answer : b. liquidity.

Coverage of fixed assets by shareholder’s equity is a good tests of---------------- a) solvency b) liquidity c) Activity d) profitability

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Ratios may be used as a measure of ------------- a) Effiency b) Solvency c) Profitability d) None of the above

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------------- gives a diagnosis of the profitability and financial position a) Analysis of financial statements b) Preparation of financial statements c) Construction of statements d) None of the above

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Ingrid’s Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company’s gross profit rate is 40%, Ingrid’s will report monthly net sales revenue and cost of goods sold of a. $38,000 and $22,800. b. $37,200 and $14,880. c. $37,200 and $22,320. d. $38,000 and $22,320.

Description : Ingrid's Fashions sold merchandise for $38,000 cash during the month of July. Returns that month totaled $800. If the company's gross profit rate is 40%, Ingrid's will report monthly net sales revenue and cost of goods ... b. $37,200 and $14,880. c. $37,200 and $22,320. d. $38,000 and $22,320.

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If a company has sales of $420,000, net sales of $400,000, and cost of goods sold of $260,000, the gross profit rate is a. 67%. b. 65% c. 35%. d. 33%.

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Last Answer : c. 35%.

The gross profit rate is computed by dividing gross profit by a. cost of goods sold. b. net income. c. net sales. d. sales.

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If a company has net sales of $500,000 and cost of goods sold of $350,000, the gross profit percentage is a. 70%. b. 30%. c. 15%. d. 100%.

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Last Answer : b. 30%

Which one of the following is shown on a multiple-step but not on a single-step income statement? a. Net sales b. Net income c. Gross profit d. Cost of goods sold

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Last Answer : c. Gross profit

Sales revenue less cost of goods sold is called a. gross profit. b. net profit. c. net income. d. marginal income.

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Cash from operations is equal to------------------ a) net profit afer tax b) net profit plus increase in current asset c) net profit plus decrease in current liabilities d) net profit plus non-cash expenses plus decrease in current

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Goodwill written off is-----------to the net profit made during the year for calculating the cash from operation a) Added back b) Deducted c) Decreased d) None of these

Description : Goodwill written off is-----------to the net profit made during the year for calculating the cash from operation a) Added back b) Deducted c) Decreased d) None of these

Last Answer : a) Added back

In the fund flow statement, depreciation is---------------- a) Deducted from net profit b) Added to net profit c) Sources of working capital d) Ignored

Description : In the fund flow statement, depreciation is---------------- a) Deducted from net profit b) Added to net profit c) Sources of working capital d) Ignored

Last Answer : b) Added to net profit

Any gain on sale of non-current asset should be ----- from the net profit for determining funds from operation a) Deducted b) Added c) Increased d) None of these

Description : Any gain on sale of non-current asset should be ----- from the net profit for determining funds from operation a) Deducted b) Added c) Increased d) None of these

Last Answer : a) Deducted

West Company has the following account balances: Purchases $48,000 Sales Returns and Allowances 6,400 Purchase Discounts 4,000 Freight-in 3,000 Delivery Expense 4,000 The cost of goods purchased for the period is a. $52,000. b. $47,000. c. $51,000. d. $44,600.

Description : West Company has the following account balances: Purchases $48,000 Sales Returns and Allowances 6,400 Purchase Discounts 4,000 Freight-in 3,000 Delivery Expense 4,000 The cost of goods purchased for the period is a. $52,000. b. $47,000. c. $51,000. d. $44,600.

Last Answer : . $47,000.

All of the following items would be reported as other expenses and losses except a. freight-out. b. casualty losses. c. interest expense. d. loss from employees' strikes.

Description : All of the following items would be reported as other expenses and losses except a. freight-out. b. casualty losses. c. interest expense. d. loss from employees' strikes.

Last Answer : a. freight-out.

Which of the following accounts has a normal credit balance? a. Sales Returns and Allowances b. Sales Discounts c. Sales d. Selling Expense

Description : Which of the following accounts has a normal credit balance? a. Sales Returns and Allowances b. Sales Discounts c. Sales d. Selling Expense

Last Answer : c. Sales

The Sales Returns and Allowances account is classified as a(n) a. asset account. b. contra asset account. c. expense account.

Description : The Sales Returns and Allowances account is classified as a(n) a. asset account. b. contra asset account. c. expense account.

Last Answer : b. contra asset account.