Coverage Ratio helps measure a company's ability to meet its obligations. The Asset side of a Balance Sheet shows the resource utilization of the company for acquisition of different assets. Book value of equity is the difference between the book values of assets and liabilities appearing on the Balance Sheet. Accumulated losses can be shown as fictitious asset at the bottom of the Asset Side. Fixed assets are recorded in the books at their cost price.

1. Coverage Ratio helps measure a company`s ability to meet its obligations.- true
Profit and Loss Account is a statement of income and expenditure_- for a particular period
Cost of Goods Sold describes both direct and indirect expenses incurred in producing goods for sale-false
The Balance Sheet summarises the profit and loss of a company in a given year.- false
The Asset side of a Balance Sheet- shows the resource utilisation of the company for acquisition of
different assets
Accumulated Depreciation is the total depreciation charged over first three years of an asset.-f
All debts irrespective of their tenure are stated together.-f
Financial Leverage Ratio indicates-SHORT TERM
Expenses towards employee benefits and amenities cannot be accounted under Salaries and
Wages.-F
Book value of equity is- he difference between the book values of assets and liabilities appearing on
the Balance Sheet
Which is NOT true about Equity Share Capital?- In the event of winding up of the company, refund is
not guaranteed.
Accumulated losses can be shown as fictitious asset at the bottom of the Asset Side-TRUE
Administrative expenses do not include-NONE OF ABOVE
Which of the following ratio categories relates stock market information to financial statement
items?-MRKT VALUE RESERVE
Competitive forces on the market have an impact on the level of inventories maintained by a
company.-T
Manufacturing expenses include-stores consumed
Excise duty is not recorded in the Profit and Loss Account.-F
Investments in quoted securities and unquoted securities should be recorded together.-f
Profit and Loss Account is the financial position of a company at a moment in time.-F
Gross Profit is the profit before Interest, Depreciation and Administrative expenses.-T
Patents and trademarks are treated as liquid assets.-F
Selling expenses do not include-FREIGHT
If a company`s Interest Coverage Ratio is 4.0, which of the following statement is true?-NONE

2. Fixed assets are recorded in the books at their cost price-T
The level of inventories maintained by a company does not depend upon-NONE
Pref shar capital enjoy guarantee of div.-F
Which is not true about average collection period.
The income received by a company from sources other than sales of products and services is
mentioned separately.-T
Inventories do not include-SPARES Return on Total Assets is measured after a firm has covered its
operating expenses, interest costs and tax obligations.-T
Average Collection Period is calculated by taking the ratio of the year-end accounts receivable and
average net sales per day-T
Capital Subsidy is a liability.-T
Sales are generally recorded at ----- gross value, including excise duty
Market Value Ratios may relate the market price of a firm`s stock to-balance sheet
Which of the following is desirable?- A low Debt to Equity ratio
Asset Management Ratios indicate the ability of a firm to meet short-term obligations to creditors as
they become due.
-A firm`s inventories on hand are Rs. 2,00,000, its cost of goods sold is Rs. 6,00,000 and its sales are
Rs. 8,00,000. What is the Inventory Turnover Ratio?
-Income is accounted in the year in which it becomes due, even if the payment is to be received next
year.
-Which of the following is a fixed asset?
-Cash profit does not take into account depreciation.
-Fixed assets should be financed from
-Financial Leverage Ratio indicates

3. .