Class 12 Accountancy 1 Mark Questions Chapter 10 Accounting Ratios

One Mark Questions for Class 12 Accountancy Chapter 10 Accounting Ratios

Question 1.
What will be the effect on current ratio if a bills payable is discharged on maturity? (CBSE SP 2019-20)
Answer:
The current ratio will increase

Question 2.
Debt Equity Ratio of a company is 1:2. Purchase of a Fixed asset for ₹ 5,00,000 on long term deferred payment basis will increase, decrease or not change the ratio?
Answer:
Increased

Question 3.
It is a simple arithmetical expression of relationship between two figures. Name the term.
Answer:
Ratio

Question 4.
The liquidity of a business firm is measured by its ability to satisfy its long-term obligations as they become due. Name a ratio used for this purpose.
Answer:
Current Ratio.

Question 5.
X Ltd. has a Debt-Equity Ratio at 3 : 1. According to the management it should be maintained at 1 : 1. What is the choice to do so?
Answer:
To increase the equity or reduce the debt.

Question 6.
How the solvency of a business is assessed by Financial Statement Analysis? (CBSE Delhi 2012)
Answer:
With the help of solvency ratios.

Question 7.
Assuming that the debt to equity ratio is 1 : 2, state giving reason, whether the ratio will improve, decline or will have no change in case equity shares are issued for cash. (CBSE Foreign 2006)
Answer:
Decrease.

Question 8.
Debt to equity ratio of a company is 08 : 1. State whether long term loan obtained by the company will increase, decrease or not change the ratio. (CBSE Outside Delhi 2008)
Answer:
Increase.

Question 9.
Inventory Turnover ratio of a company is 3 times. State, giving reason, whether the ratio improve, decline or do not change because of increase in the value of closing stock by ₹ 5,000. (CBSE Outside Delhi 2008)
Answer:
Decrease.

Question 10.
Trade Receivables Turnover Ratio of a company is 6 times. State with reason whether the ratio will improve, decrease or not change due to increase in the value of closing inventory by ₹ 50,000. (CBSE Foreign 2008)
Answer:
No change. .

Question 11.
If a company has earned ₹ 10,00,000 as profit before interest and tax, ROI is 20%. State the capital employed in the company.
Answer:
₹ 5,00,000

Question 12.
What will be operating profit if operating ratio is 88.94? (CBSE Delhi 2009)
Answer:
Operating Profit = 100 – 88.94 = 11.06

Question 13.
State with reason whether repayment of long-term loan will result in increase, decrease or no change of debt- equity ratio. (CBSE Outside Delhi 2010 Compt.)
Answer:
Decrease.

Question 14.
A company has Share Capital of ₹ 5,00,000, Reserves and Surplus of ₹ 2,00,000 and Debt Equity Ratio of 1.8 : 1. It has issued additional Share Capital of ₹ 2,00,000 for cash and bonus shares of₹ 1,00,000. What will be new Debt Equity Ratio?
Answer:
1.4 : 1