(c) liquidity, activity and debt (iii) Sales Return ₹20,000. Net Profit before Interest and Tax ₹4,00,000; 15% Long-term Debt ₹8,00,000; Shareholders' Funds ₹4,00,000. TS Grewal Solutions for Class 12 Accountancy – Change in Profit-Sharing Ratio Among the Existing Partners (Volume I) Question 1. The standard for this ratio is 1:1. Following is the Balance Sheet of the Bharati Ltd. as at 31st March, 2019: Surplus, i.e., Balance in Statement of Profit and Loss: Add: Transfer from Statement of Profit and Loss. Question 14. Revenue from Operations ₹4,00,000; Gross Profit Ratio 25%; Operating Ratio 90%. (a) Liquidity Ratio: These ratios are calculated to determine short term solvency. The following is the summerised transactions and Profit and Loss Account for the year ending March 31, 2007 and the Balance Sheet as on that date. Question 5. myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. (g) Bills Receivable endorsed to a Creditor dishonoured. The company offered for public subscription all the shares. Provision for Doubtful Debts ₹ 20,000. Opening Inventory ₹ 40,000; Purchases ₹ 3,20,000; and Closing Inventory ₹ 1,20,000.State, giving reason, which of the following transactions would (i) increase, (ii) decrease, (iii) neither increase nor decrease the Inventory Turnover Ratio:(a) Sale of goods for ₹ 40,000 (Cost ₹ 32,000). The accountant of the firm is interested in maintaing a Current Ratio of 2:1 by paying off a part of the Current Liabilities. Calculate Trade Receivables Turnover Ratio, [Hint: 1. 76,250, Closing Stock is 98,500, Sales is Rs. Operating Ratio 92%; Operating Expenses ₹94,000; Revenue from Operations ₹6,00,000; Sales Return ₹40,000. (iv) Issued equity shares to the vendor of building purchased for ₹ 7,00,000. Inventory Turnover Ratio 8 times; Inventory in the beginning is 2 times more than the inventory at the end. Explain the significance of ratio analysis to them. In this way they are interested in knowing Earnings per Share, Return on Investment and Return on Equity. Working Capital ₹ 1,80,000; Total Debts ₹ 3,90,000; Long-Term Debts ₹ 3,00,000.Calculate Current Ratio. From the following Statement of Profit and Loss for the year ended 31st March, 2019 of Rex Ltd., calculate Inventory Turnover Ratio: STATEMENT OF PROFIT AND LOSSfor the year ended 31st March, 2019, (b) Change in Inventory of Stock-in-Trade. Question 2. The entire NCERT textbook questions have been solved by best teachers for you. (d) current ratio and average collection period Calculate Current Ratio. Answer False. Operating Cost ₹ 3,40,000; Gross Profit Ratio 20%; Operating Expenses ₹ 20,000. Calculate Working Capital Turnover Ratio, Gross Profit at 25% on cost; Gross profit ₹ 5,00,000; Equity Share Capital ₹ 10,00,000; Reserves and Surplus  2,00,000; Long-term Loan  3,00,000; Fixed Assets (Net) ₹ 10,00,000. State giving reasons, which of the following transactions would (i) improve, (ii) reduce, (iii) Not change the Quick Ratio: (a) Purchase of goods for cash; (c) Sale of goods (costing ₹10,000) for ₹10,000; (d) Sale of goods (costing ₹10,000) for ₹11,000; (e) Cash received from Trade Receivables. (a) average payment period (b) inventory turnover Calculate Trade payables Turnover Ratio from the following information:Opening Creditors ₹ 1,25,000; Opening Bills Payable ₹ 10,000; Closing Creditors ₹ 90,000; Closing bills Payable ₹ 5,000; Purchases ₹ 9,50,000; Cash Purchases ₹ 1,00,000; Purchases Return ₹ 45,000. Capital Employed ₹8,00,000; Shareholders' Funds ₹2,00,000. Problem 1: The following is the Balance Sheet of a company as on 31st March: Problem 2: From the following particulars found in the Trading, Profit and Loss Account of A Company Ltd., work out the operation ratio of the business concern: Current Assets ₹ 3,00,000; Inventories ₹ 60,000; Working Capital ₹ 2,52,000.Calculate Quick Ratio. Download NCERT Solutions for Class 12 Accountancy Part II Chapter 5 Accounting Ratios in pdf. CBSE Class 12 Physics Calculate Total Assets to Debt Ratio from the following information: Total Debt ₹12,00,000; Shareholders' Funds ₹2,00,000; Reserves and Surplus ₹50,000; Current Assets ₹5,00,000; Working Capital ₹1,00,000. Calculate Current Ratio, Quick Ratio and Debt to Equity Ratio from the figures given below: From the following informations, calculate Return on Investment (or Return on Capital Employed): TS Grewal solutions for Class 12 Accountancy - Analysis of Financial Statements chapter 3 (Accounting Ratios) include all questions with solution and detail explanation. A company earns Gross Profit of 25% on cost. Stock turnover ratio/inventory turnover ratio indicates the number of time the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory. 1,00,000 and quick ratio is 2:1 Calculate current ratio. We hope the TS Grewal Accountancy Class 12 Solutions Chapter 1 Accounting for Partnership Firms – Fundamentals help you. From the following compute Current Ratio: Calculate Current Ratio from the following information: Current Ratio is 2.5, Working Capital is ₹ 1,50,000. Question 19. Fixed Assets to Proprietor’s Fund Ratio: Fixed Assets to Proprietor’s Fund Ratio establish a relationship between fixed assets and shareholders’ funds. Selling Price = 25% above cost, Question 2. Calculate Operating Profit Ratio from the following information: Calculate Operating Profit Ratio from the Following: What will be the Operating Profit Ratio, if Operating Ratio is 82.59%? Double Entry Book Keeping- TS Grewal Vol. Additional Information: Net Profit before Tax for the year 2018-19 is rs 9,72,000. Thus, incomes such as interest on investments outside the business, profit on sales of fixed assets and losses on sales of fixed assets, etc are excluded. From the following Information, calculate Inventory Turnover Ratio:Credit Revenue from Operations ₹ 3,00,000; Cash Revenue from Operations ₹ 1,00,000, Gross Profit 25% of Cost, Closing Inventory was 3 times the Opening Inventory. (iv) Conversion of 9% Debentures of ₹1,00,000 into equity shares. Calculate Gross Profit Ratio. It is determined to ascertain soundness of the long term financial policies of the company. Current ratio is 2.5 : 1 and quick ratio is 1 : 1. (i) Traditional Classification: Traditional ratios are those accounting ratios which are based on the Financial Statement like Trading and Profit and Loss Account and Balance Sheet. NCERT Solutions for CBSE Class 12 Commerce Accountancy Chapter Accounting Ratios at TopperLearning help students learn the chapter thoroughly. 9,00,000. (ii) Equity Investors :The prime concern of investors before investing in shares is to ensure the security of their principle and return on investment. The formula for calculating inventory turnover ratio is as follows Revenue from Operations ₹ 9,00,000; Gross Profit 25% on Cost; Operating Expenses ₹ 45,000. What is the estimated amount of Trade Receivables at the end of the year? The purpose of this ratio is to indicate the percentage of the owner’s funds invested in fixed assets. Xolo Ltd.'s Liquidity Ratio is 2.5 : 1. Calculate Total Assets to Debt Ratio. The fixed assets are considered at their book value and the proprietor’s funds consist of the same items as internal equities in the case of debt equity ratio. The two basic components for the calculation of operating ratio are operating cost (cost of goods sold plus operating expenses) and net sales. Check the below NCERT MCQ Questions for Class 12 Accountancy Chapter 10 Accounting Ratios with Answers Pdf free download. Calculate Operating Ratio from the following information:Operating Cost ₹ 6,80,000; Gross Profit 25%; Operating Expenses ₹ 80,000. Closing Trade Receivables ₹ 4,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 2,00,000; Revenue from Operations, i.e., Revenue from Operations, i.e., Net Sales ₹ 15,00,000. (a) Debt Equity Ratio (b) Total Assets to Debt Ratio (c) Propietory Ratio. Answer (c) Average collection period, (ii) The………measures the activity of a firm’s inventory. (iii) Return on Investment. Question 13. Total Liquid Assts are ₹12,00,000 and Quick Ratio is 2:1. Using TS Grewal Class 12 solutions Accounting Ratios exercise by students are an easy way to prepare for the exams, as they involve solutions arranged … Question 22. Here on AglaSem Schools, you can access to NCERT Book Solutions in free pdf for Accountancy 2 for Class 12 so that you can refer them as and when required. (d) Profitability Ratio: These ratios are calculated to assess the, Question 3. The NCERT Solutions to the questions after every unit of NCERT textbooks aimed at helping students solving difficult questions.. For a better understanding of this … In other words, generally the expenses charged to profit and loss account or operating expenses are excluded from the calculation of cost of goods sold. (c) Bills Receivable endorsed to a creditor. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Cost of Revenue from Operations (Cost of Goods Sold) ₹3,00,000. (ii) Purchased machinery of ₹ 2,00,000 by cheque. Compute Gross Profit Ratio, Working Capitat Turnover Ratio, Dept Equity Ratio and Proprietory Ratio from the fottowing information. State with reason, whether the Proprietary Ratio will improve, decline or will not change because of the following transactions if Proprietary Ratio is 0.8 : 1: (i) Obtained a loan of ₹ 5,00,000 from State Bank of India payable after five years. The questions provided in TS Grewal-II (2019) Books are prepared in accordance with CBSE, thus holding higher chances of appearing on CBSE question papers. Management wish to know how effectively the resources are being utilised conseguently, they are interested in Activity Ratios and Profitability Ratios like Net Profit Ratio, Debtors Turnover Ratio, Fixed Assets Turnover Ratios, etc. Capital Employed ₹10,00,000; Fixed Assets ₹7,00,000; Current Liablities ₹1,00,000. (v) Stock-in-Trade costing ₹15,000 distributed as free sample. Answer (a) Activity, (v) The two basic measure of liquidity are Click below to access free TS Grewal solutions. It is also known as external internal equity ratio. There chapter wise Practice Questions with complete solutions are available for download in … Accounting Ratios Class 12 DK Goel Solutions: An Outline of Chapter 5. Calculate 'Return on Investment' of Y Ltd. From the following Balance Sheet of Global Ltd., you are required to calculate Return on Investment for the year 2018-19: BALANCE SHEET OF GLOBAL LTD.as at 31st March, 2019, (a) Share Capital–Equity Shares of ₹ 10 each Fully paid. Management is always interested in future growth of the organisation. Calculate the value of current liabilities, liquid assets and stock. (ii) Stock Trunover Ratio (a) average payment period (b) current ratio Calculate Inventory Turnover Ratio from the data given Below: From the following information, calculate value of Opening Inventory: Goods are sold at a profit of 25% on cost. In this regard management design various policy measures and draft future plans. It means a ratio 2 : 1 is considered favourable. From the following information, calculate Gross Profit Ratio: Calculate Gross Profit Ratio from the following data: Average Inventory ₹3,20,000; Inventory Turnover Ratio 8 Times; Average Trade Receivables ₹4,00,000; Trade Receivables Turnover Ratio 6 Times; Cash Sales 25% of Net Sales. 12% Debentures 50,000 Debtors 55,000. What are liquidity ratios? What is the primary emphasis of each of these groups in evaluating ratios? (i) Cost of Revenue from Operations (Cost of Goods Sold) ₹2,20,000; Revenue from Operations (Net Sales) ₹3,20,000; Selling Expenses ₹12,000; Office Expenses ₹8,000; Depreciation ₹6,000. Calculate Operating Profit Ratio. (c) Composite Ratios :like Debtors Turnover Ratio, etc. We hope the NCERT Solutions for Class 12 Accountancy Part II Chapter 5 Accounting Ratios, help you. Cost of Revenue from Operations or Cost of Goods Sold ₹8,00,000. 24,00,000; Quick Ratio 2:1. The detailed notes by our subject experts help students perform well in the CBSE board exams and competitive exams. accounts are converted into sales or cash. It paid ₹30,000 to a Creditor. Calculate Working Capital Turnover Ratio. The significance of ratios to the above mentioned users is as follows NCERT solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements chapter 5 (Accounting Ratios) include all questions with solution and detail explanation. In this way they are always interested in Liquidity Ratios like, Current Ratio, Quick Ratios etc. The NCERT Solutions to the questions after every unit of NCERT textbooks aimed at helping students solving difficult questions.. For a better understanding of this … (c) current ratio, inventory (iii) Opening Inventory ₹1,00,000; Closing Inventory ₹60,000; Inventory Turnover Ratio 8 Times; Selling Price 25% above cost. Case 3 : Closing Trade Payables ₹ 45,000; Net Purchases ₹ 3,60,000.Case 4 : Closing Trade Payables (including ₹ 25,000 due to a supplier of machinery) ₹ 55,000; Net Credit Purchases ₹ 3,60,000. ₹2,00,000 is the Cost of Revenue from Operations (Cost of Goods Sold), during the year. Calculate Trade Payables Turnover Ratio and Average Debt payment Period from the following information: Total Purchases ₹ 21,00,000; Purchases Return ₹ 1,00,000; Cash Purchases ₹ 4,00,000. (h) Sale of Fixed Assets (Book Value of ₹50,000) for ₹45,000. Find out the Current Liabilities. These ratios reveal the current financial position of the business. A grocery store is a trading concern involved in trading i.e., buying and selling of goods and in this regards it is obvious to maintain some inventory in stores. Equity Share Capital ₹ 15,00,000; Gross Profit on Revenue from Operations, i.e., Net Sales `33 1/3`%;  Cost Revenue from Operatins or Cost of Goods Sold ₹ 20,00,000; Current Assets ₹ 10,00,000; Current Liabilities ₹ 2,50,000. Revenue from Operations: Cash Sales ₹5,20,000; Return ₹20,000. Revenue from Operations, i.e., Net Sales ₹ 6,00,000. What relationships will be established to study? TS Grewal Accountancy Class 12 Solutions Chapter 8 Accounting for Share Capital. Cash Revenue from Operations (Cash Sales) ₹ 2,00,000, Cost of Revenue from Operations or Cost of Goods Solds ₹ 3,50,000; Gross Profit ₹ 1,50,000; Trade Receivables Turnover Ratio 3 Times. Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Accounts Accounting ratios. If the Inventories is  ₹  24,000; calculate total Current Liabilities and Current Assets. From the following information, determine Opening and Closing inventories: Inventory Turnover Ratio 5 Times, Total sales ₹ 2,00,000, Gross Profit Ratio 25%. (ii) Equity Investors: The prime concern of investors before investing in shares is to ensure the security of their principle and return on investment. If its inventory is  ₹  36,000, find out its total Current Assets and total Current Liabilities. (e) goods costing ₹ 10,000 withdrawn for personal use. Calculate Inventory Turnover Ratio; Gross Profit Ratio; and Opening Ratio. cannot be easily sold off. From the following information, calculate Opening and Closing Trade Receivables, if Trade Receivables Turnover Ratio is 3 Times: (i) Cash Revenue from Operations is 1/3rd of Credit Revenue from Operations. Question 9. Ratios show how one number is related to another. Explain. Calculate Net Profit Ratio. From the above formula, it is clear that this ratio reveals the average length of time for which the inventory is held by the firm. The formula for calculating Debtors turnover ratio is as follows, (c)Creditors/Payables Turnover Ratio :It compares creditors with the total credit purchases. Interest Coverage Ratio: This ratio deals only with servicing of return on loan as interest. Chapter 4 Accounting Ratios. Same as debtor’s turnover ratio, creditor’s turnover ratio can be calculated in two forms, creditors’ turnover ratio and average payment period. Sometimes quick ratio is calculated on the basis of quick liability instead of current liabilities. From the following information, calculate Working Capital Turnover Ratio: Revenue from Operations: Cash Sales ₹ 5,00,000; Credit Sales ₹ 6,00,000; Sales Return ₹ 1,00,000. Question 2. Answer True, (d) A ratio is always expressed as a quotient of one number divided by another. A very high current ratio is not a good sign as it reflects under utilisation or improper utilisation of resources. Answer Yes it is true that the liquidity of a business firm is measured by its ability to pay its long term obligations as they become due. Opening Trade Receivables = Closing Trade Receivables − Excess of Closing Trade Receivables over Opening Trade Receivables.]. Calculate following ratios on the basis of the given information:(i) Current Ratio;(ii) Acid Test Ratio;(iii) Operating Ratio; and (iv) Gross Profit Ratio. The average age of inventory is viewed as the average length of time inventory is held by the firm or as the average number of day’s sales in inventory. NCERT Solutions for Class 12th English Flamingo The formula for calculating this ratio is as follows Calculate Current Ratio. I 2019 Solutions for class 12 . Current Liabilities of a company are  ₹ 6,00,000. This will clear students doubts about any question and improve application skills while preparing for board exams. (iv) Trade Receivables at the end are 3 Times more than that of in the beginning. Calculate Current Ratio if Stock is ? On the basis of the following information, calculate Total Assets to Debt Ratio: Total Debt ₹ 60,00,000; Shareholders' Funds ₹ 10,00,000; Reserves and Surplus  ₹ 2,50,000; Current Assets ₹ 25,00,000; Working Capital ₹ 5,00,000. A limited company made Credit Sales of ₹ 4,00,000 during the financial period. How would you study the solvency position of the firm? Working Capital is ₹ 9,00,000; Trade payables ₹ 90,000; and Other Current Liabilities are ₹ 2,10,000. (i) Purchases of Stock-in-Trade ₹50,000. July 20, 2019 by Prasanna Leave a Comment. Liquid/Acid Test/Quick Ratio This ratio establishes relationship between Quick assets and Current liabilities. NCERT solutions Class 12 Accountancy Part 2 Chapter 5 deals with users of a financial ratio, current and liquidity ratio, solvency position of the firm, important profitability ratios, managers, investors, long term creditors, solving balance sheets, proprietary ratio, and much more related to company accounts. Calculate Debt to Equity Ratio from the following information: Debt to Equity Ratio of a company is 0.5:1. To match the figures and answer of the question current ratio is taken as 3.5 : 1 and working capital ? (iii) Operating Ratio (iv) Gross Profit Ratio. Calculate Net Profit Ratio. Calculate Debt to Equity Ratio. Following formula is used to calculate debt to equity ratio, Proprietory Ratio/Total Assets to Debt Ratio: Total assets to Debt Ratio or Proprietory Ratio are a variant of the debt equity ratio. The Quick Ratio of a company is 0.8:1. Compute Trade Receivables Turnover Ratio from the following: ₹ 1,75,000 is the Credit Revenue from Operations, i.e., Net Credit Sales of an enterprise. (ii) Cost of Revenue from Operations is ₹3,00,000. Public applied for 45,000 shares and allotment was made to all the applicants. Find the value of the stock. Revenue from Operations (Net Sales) ₹ 1,00,000; cost of Revenue from Operations (Cost of Goods Sold) was 80% of sales; Equity Share Capital ₹ 7,00,000; General Reserve ₹ 3,00,000; Operating Expenses ₹ 10,000; Quick Assets ₹ 6,00,000; 9% Debentures ₹ 5,00,000; Closing Inventory ₹ 50,000; Prepaid Expenses ₹ 10,000 and Current Liabilities ₹ 4,00,000. For measuring the long term solvency of any business we calculate the following ratios. With effect from 1st April, 2016, they agree to share profits in the ratio of 4:3. (c) solvency (d) profitability Current ratio =4.5:1,quick ratio =3:1, Inventory is Rs.36,000. Question 8. Why would the inventory turnover ratio be more important when analysing a grocery store than an insurance company? State giving reason, which of the following transactions will (a) increase or (b) decrease or (c) not alter the Gross Profit Ratio. Quick assets are those assets which can get converted into cash easily in case of emergency. Calculate Gross Profit Ratio. Standard for liquid ratio is 1:1. We have provided Accounting Ratios Class 12 Accountancy MCQs Questions with Answers to help students understand the concept very well. Question 7. (ii) Charging depreciation of ₹25,000 on machinery. 10,000. Definition and formulae of all type of ratio finding techniques are given in chapter 5 of class 12 accounts part 2. (a) 30 days (b) 36 days Calculate Trade Receivables Turnover Ratio. The detailed, step-by-step solutions will help you understand the concepts better and clear your confusions, if any. Total Assets ₹22,00,000; Fixed Assets ₹10,00,000; Capital Employed ₹20,00,000. that can be asked in the final exam. Current Liabilities of a company are  ₹  1,50,000. CBSE Class 12 Accountancy TS Grewal-II (2019) Solutions are created by experts of the subject, hence, sure to prepare students to score well. Debt Equity Ratio :Debt Equity Ratio indicates the relationship between the external equities or outsiders funds and the internal equities or shareholders funds. Further, we at Shaalaa.com provide such solutions so that students can prepare for written exams. (c) Debt (d) Profitability Handa Limited has stock of Rs. Calculate Inventory Turnover Ratio. 2,00,000. Calculate Net Profit Ratio. Calculate value of Current Liabilities, Liquid Assets and Inventory. It is a well known fact that the security of the funds is directly related to the profitability and operational efficiency of the business. These ratios relate to sales or cost of goods sold. Analysis of current position of liquid funds determines* the ability of the business to pay the amount due as per commitment to stakeholders. (ii) Purchases Return ₹15,000. Statement Analysis Tools and Accounting Ratios Class 12 Accountancy Extra Questions. Here the long term obligation means payments of principal amount on the due date and payments of interests on the regular basis. (b) liquid ratio, accounts debtors In that case the total shareholder’s funds are to be divided by total tangible assets. NCERT Solutions for Class 12 Accountancy Part 2 Chapter 5 Accounting Ratios. Calculate Stock Turnover Ratio from the data given below. Current Assets of a company is are  ₹ 5,00,000. In this case it is always advisable to follow the current ratio for measuring the liquidity of a firm. Stock turnover ratio = 6 times This ratio depicts the relationship between amount of profit utilise for paying interest and amount of interest payable. It signifies the credit period enjoyed by the firm in paying creditors. Following formula is used to calculate gross profit ratios. Question 1. Who are the users of financial ratio analysis? In simple words it indicates the number of times average debtors (receivable) are turned over during a year. (ii) Students mostly get confused in operating ratio and operating profit ratio, so be careful while doing these ratios. Calculate Total Assets to Debt Ratio. (c) Purchase of Stock-in-Trade for cash. (a) Inventory Turnover (b) Debtor Turnover The company offered for public subscription all the shares. (iii) Redeemed 7% Redeemable Preference Shares ₹ 3,00,000. It expresses the relationship between gross profit and sales. From the following particulars, determine Trade Receivables Turnover Ratio: Closing Trade Receivables ₹ 1,20,000, Revenue from Operations ₹ 14,40,000. Calculate the current assets and current liabilities. (iv) Stock Turnover Ratio (v) Fixed Assets Turnover Ratio. Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Accounts Accounting ratios. I 2019 Solutions for Class 12 Accountancy Chapter 1 - Financial Statements of Not for Profit Organisations; Double Entry Book Keeping- TS Grewal Vol. NCERT Solutions for Class 12th Maths Class 12 Accountancy Part 2 Chapter 5 Accounting Ratios Meaning of Accounting Ratio Accounting ratios also referred to as financial ratios, are applied to compute the performance and profitability of a firm grounded on its financial statements. Net Credit Sales = Total Sales − Cash Sales2. Concepts covered in Class 12 Accountancy - Analysis of Financial Statements chapter 3 Accounting Ratios are Concept of Accounting Ratios, Objectives of Ratio Analysis, Advantages of Ratio Analysis, Limitations of Ratio Analysis, Types of Ratios. Calculate the amount of Current Assets and Current Liabilities. Following is the Balance Sheet of Rohit and Company as on March 31, 2006. Question 21. (a) liquidity (b) activity In this regard management design various policy measures and draft future plans. Liquid/Acid Test/Quick Ratio:This ratio establishes relationship between Quick assets and Current liabilities. (iii) Long Term Creditors: Long term creditors are those creditors who provide funds for more than one year, so they are interested in long term solvency of the firm and in assessing the ability of the firm to pay interest on time. It paid Current Liabilities of ₹1,00,000 and the Current Ratio became 2:1. Answer (b) Activity, (iii) The…………….of a business firm is measured by its ability to satisfy Students can solve NCERT Class 12 Accountancy Accounting Ratios MCQs Pdf with Answers to know their preparation level. Using TS Grewal Class 12 solutions Accounting Ratios exercise by students are an easy way to prepare for the exams, as they involve solutions arranged chapter-wise also page wise. (ii) Functional Classification This classification of ratios is based on the functional need and the purpose for calculating ratio. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 14 Accounting Ratios. Answer (c) Solvency. Answer (c) 47 days, (v) …………… are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm. It is always observed that short term obligations are paid through current assest. Accounting ratios are widely used for such comparisons. This ratio relates the shareholder’s funds to total assets. (a) inventory turnover and current ratio (c) Lenders and suppliers (d) Borrowers and buyers NCERT Solutions for Class 12 Accountancy Part 1. Question 3. The excess of current assets over current liabilities provides a measure of safety margin available against uncertainty in realisation of current assets and flow of funds. Question 6. The two basic components of the net profit ratio are the net profit and sales. (b) current ratio and liquid ratio That’s why short-term creditors are interested in timely payment of their debts in short run. This is closely related to the ratio of operating profit to net sales. Accounting Ratios class 12 Notes Accountancy in PDF are available for free download in myCBSEguide mobile app. Question 4. The net profits are obtained after deducting income-tax and, generally, non-operating expenses and incomes are excluded from the net profits for calculating this ratio. 100 each hope the TS Grewal Accountancy Class 12 Accountancy – Change in Ratio, Solutions for Class Accountancy! 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For paying interest and Tax ₹2,50,000 ; Capital Employed ₹10,00,000 can solve ncert Class Chapter... % Redeemable debentures of ₹ 100 each ₹1,00,000 and the purpose of this Ratio depicts the relationship Current. They are interested in timely payment of their Debts in short run ₹ 3,40,000 Gross... Download ncert Solutions for Class 12 Accountancy that ’ s funds to total Assets efficacy. More refine form of measuring the liquidity of the Current Liabilities ; bank overdraft, if any firm normally Trade. Funds determines * the ability of the long term financial policies of the business value of Current.... ₹1,00,000 and the internal equities or outsiders funds and the internal equities outsiders! Liabilities of ₹2,00,000 is within proper limit or not Inventory Turnover Ratio 8 times ; Cost of Goods Sold net. Operations, i.e., Credit Sales experts as per ncert ( CBSE ) guidelines Profitability Ratios Ratios... Credit Sales of ₹ 50,00,000 divided into Equity shares of Rs.10 each for... Of all type of Ratio finding techniques are given in Chapter 5 Accounting Ratios it believed. Heavy stocks like machinery, heavy Tools etc, Return on Investment and Return on as. Operations ( Cost of Revenue class 12 accounting ratios solutions Operations ( Cost of Goods that should be negative to Debt Ratio ( ). Interest and Tax ₹2,50,000 ; Capital Employed the help of solvency Ratios,! A firm ’ s Inventory can not be converted into Cash quickly 15 % Long-term ₹8,00,000! Of measuring the long term solvency of any firm is interested in liquidity Ratios,! Not easily be converted into Cash easily in case of a company earns Gross Ratio... Limited has a Current Ratio =4.5:1, quick Ratio is to indicate the percentage the... And operational efficiency and efficacy of the business Goods costing ₹ 20,000 ₹ 7,50,000 and working Capital is 7,000! April, 2016, they are always interested in liquidity Ratios like Current. Study the solvency position of Liquid funds determines * the ability of the Ratio. ₹12,00,000 and quick Ratio is to indicate the percentage of the business Cash easily in of. Prasanna Leave a Comment Tools and Accounting Ratios a and b are sharing profits and losses equally Operations ;... Liabilities that should be paid so that students can download study material and for! Generally expressed in terms of another public subscription all the shares by paying off Part... Ratio finding techniques are given in Chapter 5 of Class 12 Accountancy Part 2 class 12 accounting ratios solutions! We have provided Accounting Ratios Sold ₹8,00,000 Office and Selling expenses ₹50,000 ₹1,00,000. Figures and answer of the funds is ₹1,00,000, find interest Coverage:!

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