CUET Accountancy - Financial Statements - Ratios | Free Questions

Q1:

2026: 6 June Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

Given the following information:

Revenue from Operations Rs. 3,40,000

Cost of Revenue from Operations Rs. 1,20,000

Selling expenses Rs. 80,000

Administrative Expenses Rs. 40,000

Calculate the operating ratio.

70.59%

35.29%

58.82%

47.06%

Correct Answer

Option 1

Correct Answer

Explanation

Q2:

2026: 6 June Shift 1

Financial Statements

>

Ratios

Medium

Financial Statements

A trading firm's average inventory is Rs. 40,000. If the inventory turnover ratio is 6 times and the firm sells goods at a gross profit of 25% on sales, ascertain the gross profit of the firm.

Rs. 80,000

Rs. 60,000

Rs. 40,000

Rs. 20,000

Correct Answer

Option 1

Correct Answer

Explanation

Q3:

2026: 31 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

Match the LIST-I with LIST-II

LIST-I		LIST-II
A.	Liquidity Ratio(s)	I.	Measure long term financial stability
B.	Solvency Ratio(s)	II.	Measure to analyse the earning capacity
C.	Profitability Ratio(s)	III.	Measure ability to pay short-term obligation
D.	Activity Ratio (s)	IV.	Measure utilisation of resources

Choose the correct answer from the options given below:

A-I, B-II, C-III, D-IV

A-I, B-III, C-II, D-IV

A-I, B-II, C-IV, D-III

A-III, B-I, C-II, D-IV

Correct Answer

Option 4

Correct Answer

Explanation

Q4:

2026: 29 May Shift 2

Financial Statements

>

Ratios

Hard

Financial Statements

The current ratio is 2 : 1. Which of the following transactions would improve, reduce or change the current ratio? Match List-I with List-II

LIST-I		LIST-II
A.	Payment of unclaimed dividend	I.	Improve
B.	Purchase of Machinery against Issue of Shares	II.	Reduce
C.	Sale of goods on credit	III.	Will not be recorded
D.	Purchased goods on credit	IV.	Does not Change

Choose the correct answer from the options given below:

A-II, B-IV, C-I, D-III

A-I, B-III, C-IV, D-II

A-I, B-II, C-IV, D-III

A-IV, B-III, C-II, D-I

Correct Answer

Option 2

Correct Answer

Explanation

Q5:

2026: 29 May Shift 2

Financial Statements

>

Ratios

Easy

Financial Statements

__________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.

Shareholders

Customers

Lenders and Suppliers

Borrowers and Buyers

Correct Answer

Option 3

Correct Answer

Explanation

Q6:

2026: 29 May Shift 2

Financial Statements

>

Ratios

Medium

Financial Statements

Revenue from Operations: Cash Rs. 25,000 and Credit Rs. 75,000

Purchases : Cash Rs. 15,000 and Credit Rs. 60,000

Carriage Inwards Rs. 2,000, Salaries Rs. 25,000, Decrease in Inventory Rs. 10,000, Return Outwards Rs. 2,000, and Wages 5,000. The Gross Profit ratio will be:

20%

15%

11.11%

10%

Correct Answer

Option 4

Correct Answer

Explanation

Q7:

2026: 29 May Shift 1

Financial Statements

>

Ratios

Hard

Financial Statements

Calculate current assets of a company from the following information:

Inventory turnover ratio = 4 times

Inventory at the end is Rs. 20,000 more than the inventory in the beginning. Revenue from Operations Rs. 3,00,000 and gross profit ratio is 20% of revenue from operations.

Current liabilities = Rs. 40,000

Quick ratio = 0.75 : 1

Rs. 1,20,000

Rs. 30,000

Rs. 70,000

Rs. 1,00,000

Correct Answer

Option 4

Correct Answer

Explanation

Q8:

2026: 29 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

Match List-I with List-II

List-I (Accounting Ratio)	List-II (Objectives/ Use of Accounting Ratio)
(A) Liquidity Ratio	(I) To know the earning capacity of the business
(B) Profitability Ratio	(II) To know the ability to pay long-term obligations
(C) Solvency Ratio	(III) To know the efficiency of business operations
(D) Activity Ratio	(IV) To know the ability to pay short-term obligations

Choose the correct answer from the options given below:

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (II), (B) - (III), (C) - (I), (D) - (IV)

(A) - (IV), (B) - (II), (C) - (III), (D) - (I)

(A) - (IV), (B) - (I), (C) - (II), (D) - (III)

Correct Answer

Option 4

Correct Answer

Explanation

Q9:

2026: 24 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

X Ltd., has a current ratio of 2:1 and quick ratio of 1.5:1. If excess of current assets over quick assets represented by inventories is Rs. 24,000. Calculate current assets and current liabilities.

Current Assets Rs. 1,20,000 and Current Liabilities Rs. 48,000

Current Assets Rs. 72,000 and Current Liabilities Rs. 48,000

Current Assets Rs. 96,000 and Current Liabilities Rs. 48,000

Current Assets Rs. 96,000 and Current Liabilities Rs. 24,000

Correct Answer

Option 3

Correct Answer

Explanation

Q10:

2026: 24 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

"Ratio analysis is indispensable part of interpretation of results revealed by the financial statements." Which of the following is not an objective of Ratio Analysis?

To know about the potential areas which can be improved with the effort in the desired direction.

To know the areas of the business which need more attention.

To provide information derived from financial statements useful for making projections and estimates for the future.

To forecast consideration of non-financial factors.

Correct Answer

Option 4

Correct Answer

Explanation

Q11:

2026: 23 May Shift 2

Financial Statements

>

Ratios

Hard

Financial Statements

As per the information given below, what will be the amount of Gross Profit?

Average Inventory = Rs. 80,000

Inventory Turnover Ratio = 8 times

Selling Price = 20% above revenue from operations

Rs. 80,000

Rs. 1,40,000

Rs. 1,60,000

Rs. 60,000

Correct Answer

Option 3

Correct Answer

Explanation

Q12:

2026: 23 May Shift 2

Financial Statements

>

Ratios

Hard

Financial Statements

The current ratio is 2 : 1. Identify which of the following transactions would improve, reduce and not change the current ratio. Match the LIST-I with LIST-II

LIST-I		LIST-II
A.	Payment of current liability	I. Current ratio will reduce
B.	Sold goods on credit	II. Current ratio will improve
C.	Purchased goods on credit	III. No change in current ratio

Choose the correct answer from the options given below:

A-II, B-I, C-III

A-III, B-I, C-II

A-I, B-II, C-III

A-II, B-III, C-I

Correct Answer

Option 4

Correct Answer

Explanation

Q13:

2026: 21 May Shift 2

Financial Statements

>

Ratios

Medium

Financial Statements

Match the LIST-I with LIST-II

LIST-I		LIST-II
A.	The ratio provides a measure of the capacity of the business to meet its short-term obligations without any flaw.	I. Total Assets to Debt Ratio
B.	This ratio measures the extent of the coverage of long-term debts by assets.	II. Interest Coverage Ratio
C.	This ratio indicates the number of times receivables are turned over and converted into cash in an accounting period.	III. Quick Ratio
D.	It is a ratio which deals with the servicing of interest on loans. It is a measure of security of interest payable on long-term debts.	IV. Trade Receivables Turnover Ratio

Choose the correct answer from the options given below:

A-I, B-II, C-III, D-IV

A-III, B-I, C-IV, D-II

A-I, B-II, C-IV, D-III

A-III, B-IV, C-I, D-II

Correct Answer

Option 2

Correct Answer

Explanation

Q14:

2026: 21 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

Share capital Rs. 4,00,000; Reserves and surplus Rs.1,00,000; Long-term borrowings Rs. 2,00,000; Fixed assets Rs. 4,00,000; Non-current investments Rs. 1,00,000; Current Assets Rs. 2,00,000. From the given information, the Total Assets to Debt Ratio will be:

3.5:1

3:1

2:1

1:1

Correct Answer

Option 1

Correct Answer

Explanation

Q15:

2026: 21 May Shift 1

Financial Statements

>

Ratios

Medium

Financial Statements

Total Revenue from Operations Rs. 1,00,000

Total Purchases Rs. 75,000

Carriage Inwards Rs. 2,000, Salaries Rs. 25,000, Decrease in Inventory Rs. 10,000, Return Outwards Rs. 2,000, and Wages 5,000. The Gross Profit ratio will be:

11.11%

10%

20%

15%

Correct Answer

Option 2

Correct Answer

Explanation

Q16:

2026: 21 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

Match List-I with List-II

List-I	List-II
(A) Inventories at the end and other current assets such as prepaid expenses, advance tax, etc. are not included in	(I) Advantage of Ratio Analysis
(B) Identification of problem areas	(II) Quick Assets
(C) Ratios are means to an end rather than the end by itself	(III) Current Ratio
(D) 2:1 is the benchmark of	(IV) Limitation of the ratios

Choose the correct answer from the options given below:

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

(A) - (III), (B) - (I), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (II), (B) - (I), (C) - (IV), (D) - (III)

Correct Answer

Option 4

Correct Answer

Explanation

Q17:

2026: 20 May Shift 1

Financial Statements

>

Ratios

Medium

Financial Statements

From the following details, calculate interest coverage ratio: Net Profit after tax Rs. 1,20,000; 15% Long-term debt 20,00,000; and Tax rate 40%.

1.67 times

1.75 times

1.89 times

1.95 times

Correct Answer

Option 1

Correct Answer

Explanation

Q18:

2026: 20 May Shift 1

Financial Statements

>

Ratios

Medium

Financial Statements

The current ratio of a firm is 2 : 1. If the firm purchased goods on credit, then how will it affect its current ratio?

Improve

Reduce

No change

The ratio will increase for some time and reach its highest point.

Correct Answer

Option 2

Correct Answer

Explanation

Q19:

2026: 19 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

Which of the following studies the frequency of conversion of inventory of finished goods into revenue from operations.

Trade receivable Turnover

Inventory Turnover

Fixed assets Turnover

Working capital Turnover

Correct Answer

Option 2

Correct Answer

Explanation

Q20:

2026: 19 May Shift 1

Financial Statements

>

Ratios

Medium

Financial Statements

A trader carries an average inventory of Rs. 40,000. His inventory turnover ratio is 8 times. If he sells goods at a profit of 20% on Revenue from operations, find out the gross profit.

₹ 80,000

₹ 4,00,000

₹ 3,20,000

₹ 40,000

Correct Answer

Option 1

Correct Answer

Explanation

Q21:

2026: 13 May Shift 2

Financial Statements

>

Ratios

Hard

Financial Statements

The current ratio is 2 : 1. Which of the following transactions would improve, reduce or not change the current ratio?

Match List-I with List-II

List-I	List-II
(A) Payment of unclaimed dividend	(I) Improve
(B) Purchase of Machinery against Issue of Shares	(II) Reduce
(C) Sale of goods on credit	(III) Will not be recorded
(D) Purchased goods on credit	(IV) Does not Change

Choose the correct answer from the options given below:

(A) - (II), (B) - (IV), (C) - (I), (D) - (III)

(A) - (I), (B) - (III), (C) - (IV), (D) - (II)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (IV), (B) - (III), (C) - (II), (D) - (I)

Correct Answer

Option 2

Correct Answer

Explanation

Q22:

2026: 13 May Shift 2

Financial Statements

>

Ratios

Easy

Financial Statements

The higher current ratio is not a symbol of strength of a firm, rather it is the sign of:

Better Solvency position

Under utilization of resources

Efficiency

Not able to pay dues on time

Correct Answer

Option 2

Correct Answer

Explanation

Q23:

2026: 13 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

What is the other name of Quick Ratio

Liquidity Ratio

Current Ratio

Gross Profit Ratio

Acid Test Ratio

Correct Answer

Option 4

Correct Answer

Explanation

Q24:

2026: 13 May Shift 1

Financial Statements

>

Ratios

Easy

Financial Statements

Match List-I with List-II

List-I (ACCOUNTING RATIO)	List-II (CATEGORY)
(A) Total Assets to Debt Ratio	(I) Profitability Ratio
(B) Investment (Net assets) Turnover Ratio	(II) Solvency Ratio
(C) Acid-Test Ratio	(III) Activity Ratio
(D) Return on Investment	(IV) Liquidity Ratio

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (II), (B) - (III), (C) - (IV), (D) - (I)

(A) – (I), (B) – (II), (C) – (IV), (D) – (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q25:

2026: 12 May Shift 1

Financial Statements

>

Ratios

Medium

Financial Statements

Simrit Ltd. has a current ratio of 3.5:1 and quick ratio of 2:1. If excess of current assets over quick assets as represented by inventories is Rs. 24,000, What will be the current assets in this case?

Rs. 32,000

Rs. 16,000

Rs. 56,000

Rs. 28,000

Correct Answer

Option 3

Correct Answer

Explanation

Q26:

2026: 11 May Shift 2

Financial Statements

>

Ratios

Medium

Financial Statements

The current ratio is 2 : 1. Which of the following transaction would improve current ratio of a company?

Sale of merchandise (goods) costing Rs. 70,000 for Rs. 71,000

Purchase of goods of Rs. 60,000 on credit

Cash received from trade receivables

Conversion of 5% Preference Shares into 12% Debebtures

Correct Answer

Option 1

Correct Answer

Explanation

Q27:

2026: 11 May Shift 2

Financial Statements

>

Ratios

Easy

Financial Statements

The two basic measures of liquidity are:

Inventory turnover and current ratio

Current ratio and liquid ratio

Gross profit margin and operating ratio

Current ratio and average collection period

Correct Answer

Option 2

Correct Answer

Explanation

Q28:

2026: 11 May Shift 1

Financial Statements

>

Ratios

Medium

Financial Statements

ABC Ltd has an average inventory of Rs. 20,000 at cost. If the Inventory Turnover Ratio is 8 times and the firm sells goods at a gross profit of 20% on sales. Calculate the gross profit of ABC Ltd.

Rs.32,000

Rs.16,000

Rs.40,000

Rs.36,000

Correct Answer

Option 3

Correct Answer

Explanation

Q29:

2025: 4 June Shift 2

Financial Statements

>

Ratios

Easy

Financial Statements

Higher turnover ratio means:

under utilization of assets

improper utilization of assets

better utilization of assets

signifies decreased efficiency

Correct Answer

Option 3

Correct Answer

Explanation

Q30:

2025: 4 June Shift 2

Financial Statements

>

Ratios

Easy

Financial Statements

Liquid Ratio is also known as:

(A) Current Ratio

(B) Quick Ratio

(C) Acid- Test Ratio

(D) Working Capital Ratio

Choose the correct answer from the options given below:

(B), (C) and (D) only

(B) only

(C) Only

(B) and (C) only

Correct Answer

Option 4

Correct Answer

Explanation

CUET Accountancy: Financial StatementsRatios. Free, no login required.

Q1:

Q2:

Q3:

Q4:

Q5:

Q6:

Q7:

Q8:

Q9:

Q10:

Q11:

Q12:

Q13:

Q14:

Q15:

Q16:

Q17:

Q18:

Q19:

Q20:

Q21:

Q22:

Q23:

Q24:

Q25:

Q26:

Q27:

Q28:

Q29:

Q30:

CUET Accountancy Past Year Questions (Topic-Wise)