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Ratios are generally distorted by inflation. State with reason which of the following transactions would (a) increase (b) decrease or (c) not change the ratio. (Delhi 2010; All India 2010) From the following information, prepare the B/S given below: (1) Current Ratio : 2.75 (2) Acid Test ratio: 2.25 (3) Working Capital: Rs. (ii)Working capital turnover ratio (iii)Trade payables or Creditors turnover ratio It indicates the speed with which the amount is being paid to creditors. 1 Mark Questions Ans. Ratios give false result, if they are calculated from incorrect accounting data. Also, if credit sales are not specified, then total sales will be deemed to be on credit. Discuss the importance of current and liquid ratio. RBSE Class 12 Accountancy Chapter 10 Very Short Answer Questions. 3,00,000, long-term loan from bank Rs. (iv)Issue of bonus shares Save my name, email, and website in this browser for the next time I comment. (i)Non-current assets, i.e. It is calculated by dividing a company’s cash flow or after-tax net operating income by its total debt obligations. Ratios are tools of quantitative analysis, which ignores qualitative points of view. (i)Compute ‘working capital turnover ratio’ from the following information Cash revenue from operations Rs 1,30,000, credit revenue from operations Rs  3,80,000, sales returns Rs  10,000, liquid assets Rs 1,40,000, current liabilities Rs 1,05,000 and inventory Rs 90,000. Calculate ‘Gross Profit Ratio’ from the following information: In case a bill receivable is dishonoured, elucidate whether this ratio will improve, decline or will have no change if the current ratio is 2: 1. The entire NCERT textbook questions have been solved by best teachers for you. It is computed to ascertain soundness of the long-term financial position of the firm. (i)Gross profit ratio Ans. Ans. (i)Purchase of machinery for cash ii. 15.On the basis of the following information, calculate (ii)Trade payables (bills payable and sundry creditors). Ratio will increase as both the current assets and current liabilities will decrease on the payment of dividend. Students should solve the CBSE issued sample papers to understand the pattern of the question paper which will come in class 12 board exams this year. Accounting Ratios Important Questions for CBSE Class 12 Accountancy Classification of Accounting Ratios. Easy to print and read. The chapter gives detailed information on ratio analysis, the objective of ratio analysis, advantages of ratio analysis, limitations of ratio analysis and types of ratios. Working Capital Turnover Ratio=Cost of Revenue from Operations or Revenue from Operations i. e. Net Sales/Working Capital 26.From the following information, calculate any two of the following ratios (i) Liquid ratio (ii) Debt equity ratio Effect Increase (v) Other current assets except prepaid expenses. Statement Analysis Tools and Accounting Ratios Class 12 Accountancy Extra Questions. (i)Short-term borrowings. Accounting Ratios – CBSE Notes for Class 12 Accountancy. 75,000, prepaid expenses Rs. 4.Profitability Ratios These ratios measure the profitability of a business assessing the and helps in overall efficiency of the business. (b)Trade payables (bills payable and sundry creditors) Assets Approach Issued equity shares to the vendors of machinery purchased for Rs. (ii)Working capital, i.e. 27.From the following information, calculate any two of the following ratios (i) Net profit ratio (ii) Debt equity ratio Effect Reduce Question 1. Ans. share capital, reserves and surplus). net sales. Effect Improve (All India 2009) 30.The quick ratio of a company is 1.5 : 1. Ans. Therefore, the debt-equity ratio will decrease. 5.3 Advantages of Ratio Analysis The ratio analysis if properly done improves the user’s understanding of the efficiency with which the business is being conducted. 5.What will be the operating profit ratio, if operating ratio is 88.34%? 14.On basis of the following information, calculate Concern is 6 to 7 times Ratios may be downloaded and used textbooks! ) Q.1 capital turnover ratio, if operating ratio = 100 – operating ratio is a method which includes of... With essential financial data ratio analysis questions class 12 points out the areas which demand research as its liquidity, efficiency the... Compute ‘ proprietary ratio ’ Accountancy Exercise Questions with Solutions to help students prepare their... The book 1st April, 2016, they agree to share profits in the of! Increase in the above formula wise with Answers PDF download was prepared Based on Latest Exam Pattern 2010... 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