Deck 9: Ratios and Turnovers in Accounting

Question 1

The ratio which measures the relationship between the cost of goods sold and the amount of average inventory is

A)stock turnover ratio.
B)debtors velocity ratio.
C)creditors velocity ratio.
D)working capital turnover ratio.

Answer 1

stock turnover ratio.

Question 2

Sales - Gross Profit = .

A)net profit.
B)administrative expenses.
C)cost of production.
D)cost of goods sold.

Answer 2

cost of goods sold.

Question 3

Opening stock + purchases + direct expenses - closing stock =

A)net profit.
B)cost of production
C)administrative expenses.
D)cost of goods sold

Answer 3

cost of goods sold

Question 4

Which ratio measures the number of times the receivables are rotated in a year in terms of sales?

A)stock turnover ratio.
B)debtors turnover ratio.
C)creditors velocity ratio.
D)working capital turnover ratio.

Question 5

Debtors turnover ratio is also called .

A)stock turnover ratio.
B)debtors velocity ratio.
C)creditors velocity ratio.
D)working capital turnover ratio

Question 6

Creditors turnover ratio is also called .

A)stock turnover ratio.
B)debtors velocity ratio.
C)accounts payables ratio.
D)working capital turnover ratio.