This quiz works best with JavaScript enabled. Home > Economy > Accounting > Accounting – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Accounting Quiz 12 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. When goodwill is received in cash and retained in the business upon admission of a new partner the old partners' capital accounts are credited in the A) Capital ratio. B) Sacrificing ratio. C) Old profit sharing ratio. D) New profit sharing ratio. Show Answer Correct Answer: B) Sacrificing ratio. 2. Which are the determinants of dividend policy? A) Liquidity Position. B) Legal Requirement. C) Working Capital Requirement. D) All of the above. Show Answer Correct Answer: D) All of the above. 3. "Capital budgeting is long term planning for making and financing proposed capital outlays. " Who said? A) Lynch. B) J. Betty. C) Philippatos. D) Charles T. Horngreen. Show Answer Correct Answer: D) Charles T. Horngreen. 4. The dividend on equity shares is only paid when dividend on .....has already been paid. A) Bond. B) Debenture. C) Equity Shares. D) Preference Shares. Show Answer Correct Answer: D) Preference Shares. 5. Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called A) Arbitrage. B) Cash transactions. C) Differential actions. D) Forward transactions. Show Answer Correct Answer: A) Arbitrage. 6. The following item is shown in profit and loss appropriation account. A) Current assets. B) Dividends declared. C) Non-operating expenses. D) Discount of issue of shares. Show Answer Correct Answer: B) Dividends declared. 7. If the annual cash inflows are constant, the pay-back period can be computed by clividing cash outlay by A) Profit. B) Expenses. C) Annual cash inflow. D) Annual Sales flows. Show Answer Correct Answer: C) Annual cash inflow. 8. Which of the following term is used to represent the proportionate relationship between debt and equity? A) Cost of capital. B) Capital structure. C) Assets Structure. D) Capital Budgeting. Show Answer Correct Answer: B) Capital structure. 9. Suppliers and creditors of a firm are interested in A) Debt position. B) Liquidity position. C) Profitability position. D) Market share position. Show Answer Correct Answer: B) Liquidity position. 10. The implementation of a common market involves all of the following except A) A common tax system and monetary union. B) Prohibition of restrictions on factor movements. C) A common tariff levied in imports from non-members. D) Elimination of trade restrictions among member countries. Show Answer Correct Answer: A) A common tax system and monetary union. 11. The degree of financial leverage reflects the responsiveness of A) EPS to change in EBIT. B) EPS to change in total revenue. C) Operating income to change in total revenue. D) None of the above. Show Answer Correct Answer: A) EPS to change in EBIT. 12. If the equity shareholder purchases the shares of the company at more than the face value of the share then the.....is calculated. A) Payout Ratio. B) Debt Equity Ratio. C) Earnings Yield Ratio. D) Dividend Yield Ratio. Show Answer Correct Answer: C) Earnings Yield Ratio. 13. Which is a approach of valuation? A) Asset based approach to valuation. B) Earnings based approach to valuation. C) Market value based approach to valuation. D) All of the above. Show Answer Correct Answer: D) All of the above. 14. The stock turnover ratio may be calculated as ..... A) Turnover at cost / stock at cost. B) Cost of goods sold / Average stock. C) Turnover at selling price /Stock at selling price. D) Any of the above. Show Answer Correct Answer: B) Cost of goods sold / Average stock. 15. Current Ratio can be computed by A) Assets / Stock. B) Stock / Debtors. C) (Stock + Cash + Share) /100. D) Current Assets / Current Liabilities. Show Answer Correct Answer: D) Current Assets / Current Liabilities. 16. The equation for the Debt equity ratio is A) Net Profit / Net Sales. B) Liquid Assets / Current Liability. C) Long term Debt / Equity Capital. D) Current Assets / Current Liability. Show Answer Correct Answer: C) Long term Debt / Equity Capital. 17. ROI stands for A) Return of Income. B) Ratio of Investment. C) Return on Investment. D) None of these. Show Answer Correct Answer: C) Return on Investment. 18. The main objective of providing depreciation is A) To reduce tax burden. B) To calculate true profit. C) To provide funds for replacement of fixed assets. D) To show the true financial position in the balance sheet. Show Answer Correct Answer: D) To show the true financial position in the balance sheet. 19. Accelerated depreciation method is also called A) Annuity Method. B) Insurance Policy method. C) Fixed installment method. D) Sum of the years digit method. Show Answer Correct Answer: D) Sum of the years digit method. 20. General donations of relatively large amount is recorded on the A) Liabilities side of Balance Sheet. B) Receipts side of Receipts and Payments Account. C) Both (a) and (b). D) Income side of Income and Expenditure Account. Show Answer Correct Answer: C) Both (a) and (b). ← PreviousNext →Related QuizzesEconomy QuizzesAccounting Quiz 1Accounting Quiz 2Accounting Quiz 3Accounting Quiz 4Accounting Quiz 5Accounting Quiz 6Accounting Quiz 7Accounting Quiz 8Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books