Case Based MCQs of Accounting Ratios (Class 12)

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Looking for Case Based MCQs of Accounting Ratios chapter with answers of class 12 Accountancy CBSE, ISC, and state Board.

We have compiled very important Case Based MCQs with answers of the Accounting Ratios chapter of class 12 Accountancy

Case-Based Multiple Choice Questions of Accounting Ratios of Class 12 Accountancy with answers.

Let’s Practice

Q.1 A pharmaceutical company wanted to analyze its profitability position along with a check on its inventory level for the past two years. The following data is available for your reference for the year ended.

31st March 202031st March 2021
Revenue from Operations42,00,00060,00,000
Inventory7,20,00015,00,000

During the year 2019,20, the inventory increased by 20%. Gross Profit is 25% on the cost of revenue of operations.

You are required to answer the following questions on the basis of the above information:

1. State the amount of inventory increased during the year 2019-20.

a) ₹ 1,44,000
b) ₹ 80,000
c) ₹ 1,20,000
d) ₹ 72,000

Ans – c)

2. The average inventory of the year 2019-20 is _

a) ₹ 6,60,000
b) ₹ 9,36,000
c) ₹ 9,12,000
d) ₹ 6,80,000

Ans – a)

3. The inventory turnover ratio of year 2019,20 is __

a) 4.05 times
b) 5.7 times
c) 5.09 times
d) 4.87 times

Ans – c)

4. Inventory turnover Ratio of 2020-21 is _

a) 4.87 times
b) 5.7 times
c) 4.05 times
d) 4.32 times

Ans – d)

Q.2 Alpha Ltd., an electronic manufacturing company wants to analyse its credit policy and see how much amount is usually blocked in Trade Receivables. For this, some details are given below:

Trade Receivables Turnover Ratio4 times
Cost of Revenue from Operations₹ 6,40,000
Gross Profit Ratio20%

Closing Trade Receivables were ₹ 20,000 more than at the beginning.

Cash Revenue from Operations being 33 and 1/3rd% of Credit Revenue from Operations.

From the information given above, answer the following questions:

1 State the amount of Revenue from operations.
a) ₹ 6,00,000
b) ₹ 8,00,000
c) ₹ 10,00,000
d) ₹ 12,00,000

Ans – b)

  1. State the amount of Gross Profit earned during the year.

a) ₹ 1,60,000
b) ₹ 1,40,000
c) ₹ 1,00,000
d) ₹ 1,28,000

Ans – a)

  1. State the amount of opening Trade Receivables.

a) ₹ 1,20,000
b) ₹ 1,60,000
c) ₹ 1,40,000
d) ₹ 1,00,000

Ans – c)

  1. State the amount of Closing Trade Receivables.

a) ₹ 1,20,000
b) ₹ 1,40,000
c) ₹ 1,60,000
d) ₹ 1,00,000

Ans – c)

Q.3 Accounts Guru Ltd wants to analyse its liquidity position along with an assessment of Inventory position from the given information.

Inventory Turnover Ratio = 4 times

Inventory, in the beginning, was ₹ 20,000 less than Inventory at the end.

Revenue from Operations ₹ 6,00,000, Current Liabilities ₹ 60,000.

Gross Profit Ratio 25%, Quick Ratio 0.75 : 1

From the following given above, answer the following questions:

1. State the amount of cost of Revenue from operations.

a) ₹ 4,50,000
b) ₹ 4,90,000
c) ₹ 4,80,000
d) ₹ 3,50,000

Ans – a)

2. State the amount of average inventory.

a) ₹ 1,25,000
b) ₹ 1,12,500
c) ₹ 2,50,000
d) ₹ 1,52,000

Ans – b)

3. State the amount of closing inventory.

a) ₹1,12,000
b) ₹1,12,500
c) ₹1,67,500
d) ₹1,22,500

Ans – d)

4. State the current ratio of Accounts Guru Ltd.

a) 2.4:1
b) 2.5:1
c) 2.79:1
d) 2.6:1

Ans – c)

Q.4 Teaching Point Ltd. is interested to know the return on their total investment made in their company. The company is also interested to know what portion of the total assets have been financed through Long term debts.

Net Profit after interest and tax ₹ 1,00,000; Current assets ₹ 4,00,000; Current liabilities ₹ 2,00,000; Tax rate 20%; Fixed assets ₹ 6,00,000; 10% Long term debt ₹ 4,00,000.

On the basis of the above information, answer the following questions:

1 State the amount of Capital Employed.

a) ₹ 10,00,000
b) ₹ 6,00,000
c) ₹ 8,00,000
d) ₹ 12,00,000

Ans – c)

  1. State the amount of Net Profit before Interest and Tax.

a) ₹ 1,25,000
b) ₹ 1,45,000
c) ₹ 1,65,000
d) ₹ 1,90,000

Ans – c)

  1. The Return on Investment is __

a) 20.62%
b) 21%
c) 21.62%
d) 19.62%

Ans – a)

  1. Find Total Asset to Debt Ratio.

a) 2.4 times
b) 2.5 times
c) 3 times
d) 4 times

Ans – b)

Q.5 Read the following hypothetical extract of Rehan Limited and answer the given questions on the basis of the same:

Year202020192018
Amount(in ₹)(in ₹)(in ₹)
Outstanding Expenses50,00040,00025,000
Prepaid Expenses3,00,0002,50,0003,50,000
Trade Payables18,00,00016,00,00014,00,000
Inventory12,00,00010,00,00011,00,000
Trade Receivables11,00,0008,00,00010,00,000
Cash in Hand17,00,00012,00,00015,00,000
Revenue from Operations24,00,00018,00,00020,00,000
Gross Profit Ratio12%15%18%

1 Current Ratio for the year 2020 will be ________.

a) 2:1
b) 1.8:1
c) 2.32:1
d) 2.4:1

Ans – c)

  1. Quick Ratio for the year 2018 will be ______ .

a) 1.75 : 1
b) 1.8 : 1
c) 0.94 : 1
d) 1.25 : 1

Ans – a)

3. The Inventory Turnover ratio for the year 2020 will be _

a) 1.62 times
b) 1.82 times
c) 1.55 times
d) 1.92 times

Ans – d)

4. Cost of Revenue from Operations for the year 2020 would be _ .

a) ₹ 21,12,000
b) ₹ 21,13,000
c) ₹ 21,15,000
d) ₹ 21,17,000

Ans – a)

Q.6 Choose the correct option to answer the questions given with the help of the information given below:

InformationAmount (₹)
Revenue from operations2,00,00
Gross Profit75,000
Office Expenses15,000
Selling Expenses26,000
Interest on Debentures5,000
Accidental losses12,000
Income from rent2,500
Commission received2,000
Current assets60,000
Current liabilities10,000

1 The Operating profit of the concern is:

a) ₹ 45,000
b) ₹ 36,000
c) ₹ 40,000
d) ₹ 52,000

Ans – b)

The Operating profit Ratio is:

a) 18%
b) 21%
c) 35%
d) 15%

Ans – a)

The Working Capital of the conern is:

a) ₹ 40,000
b) ₹ 30,000
c) ₹ 48,000
d) ₹ 50,000

Ans – d)

The Working Capital Turnover ratio is:

a) 6 times
b) 2 times
c) 4 times
d) 3 times

Ans – c)

Choose the correct option to answer the questions given with the help of the information given below:

InformationAmount (₹)
Paid up share capital8,00,000
Current Assets5,00,000
Credit revenue from operations3,00,000
Cash revenue from operations75% of credit revenue from operations
9% Debentures3,40,000
Current liabilities2,90,000
Cost of revenue from operations6,80,000

1 The Total Revenue from Operations of the concern is:

a) ₹ 4,40,800
b) ₹ 5,25,000
c) ₹ 6,48,000
d) ₹ 4,50,000

Ans – b)

  1. The Gross Profit Ratio of the concern is:

a) 32.8%
b) 29.52%
c) 28.35%
d) 34.65%

Ans – b)

The working capital turnover ratio is:

a) 4.5 times
b) 2.5 times
c) 1.5 times
d) 3 times

Ans – b)

Proprietary ratio of the concern is:

a) 0.56:1
b) 1:1
c) 0.52:2
d) 0.26:3

Ans – a)

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