Accounting Ratios - Class 12 Accountancy - Chapter 9 - Notes, NCERT Solutions & Extra Questions
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Extra Questions - Accounting Ratios | NCERT | Accountancy | Class 12
The unintentional omission or commission of amounts and accounts in the process of recording transactions are known as __________.
A. frauds
B. misinterpretation
C. errors
D. misrepresentation
The correct answer is C. errors.
Unintentional omissions or errors in entry during the recording of transactions are referred to as errors. It's important to note that the trial balance may still balance despite these errors.
If the selling price is fixed 25% above the cost, the Gross Profit ratio is:
A) 13% B) 28% C) 26% D) 20%
Solution
The correct answer is D) $20%$.
Let the cost price be represented as $x$. Given that the selling price is $25%$ higher than the cost, it can be expressed as: $$ 1.25x $$
The profit made is the difference between selling price and cost price, which is: $$ 0.25x $$
The Gross Profit Ratio is calculated as the profit divided by the selling price, multiplied by 100 to get a percentage: $$ \text{Gross Profit Ratio} = \frac{0.25x}{1.25x} \times 100 = 20% $$
Therefore, the correct answer is option D) 20%.
"Ratios enable comparison of two different scenarios on the basis of accounting information.
A. Financial
B. Costing
C. Information
D. Accounting"
The correct answer is D. Accounting.
Accounting ratios enable the comparison of two different scenarios based on accounting information. These ratios, derived from financial statements, illustrate the relationship between various accounting variables.
The sale value of a useless asset is called:
A) Residual Value B) Scrap Value C) Both A and B D) None of these
The correct answer is C) Both A and B.
The sale value of a useless asset can be referred to as both residual value and scrap value, encompassing both terms in this context.
The ideal level of current ratio is:
Option 1) 4:2
Option 2) 2:1
Option 3) 4:2 or 2:1
Option 4) None of these
The correct option is B: 2:1.
A current ratio of 2:1 is considered ideal in many cases. This implies that the current assets can cover the current liabilities two times over.