Interpretation of accounts using ratios - Jamb Accounts - Principles of Accounts Past Questions and Answers

Question 1:

• JAMB 1994

The term "accounting period" is used to refer to the

A. Time span during which taxes are paid to the inland revenue board
B. Budget period, usually one year, relied on by the accountant
C. Time span, usually one year, covered by financial statement
D. Period within which debtors are expected to settle accounts

Question 2:

• JAMB 1994

An advantage of using accounting ratios is that they

A. Can be easily calculated
B. Facilitate decision making
C. Are stipulated by law
D. Shows error and fraud

Question 3:

• JAMB 1995

Which of the following ratios gives an idea of the liquidity of a firm?

A. Turnover ratio
B. Quick ratio
C. Debit ratio
D. Dividend yield

Question 4:

• JAMB 1995

The measure of a company's ability to pays its debts quickly is called

A. Current ratio
B. Turnover ratio
C. Acid test ratio
D. Return of investment

Question 5:

• JAMB 1997

What is the working capital?

A. N12 000
B. N 11 000
C. N 8 000
D. N4 000