IFY Sections M, N, O MCQ

On a statement of financial position, there is an entry for inventories. This will appear under the heading of:

• Non-current assets

• Current Liabilities

• Non-current liabilities

• Current assets

Which of the following financial ratios would be used to assess how a company is financed?

• Acid test ratio

• Return on capital employed

• Gearing ratio

• Current Ratio

In March 2023, a business sold 3000 units at an average revenue of £5. The corresponding budget for March 2023 was 3200 units at an average revenue of £4.75. The budget variance for sales revenue in March 2022 was?

• £200 adverse

• £750 adverse

• £200 favourable

• £750 favourable

A company has recently purchased a new vehicle at a cost of £50,000 which has been financed using a long-term bank loan. The £50,000 bank loan will be recorded on the company's statement of financial position as a:

• Non-Current Liability

• Current Asset

• Current Liability

• Non-current asset

Which of the following accounting ratios is not influenced by the level of inventories?

• Current ratio

• Return on capital employed

• Gearing ratio

• Acid test ratio

Which of the following could be used to improve a business's cash flow?

• An increase in inventories

• An increase in sales

• An increase in overdraft

• An increase in trade receivables

Assuming no other changes, which of the following would increase a business’ current ratio?

• A) A decrease in inventories

• B) An increase in trade payables

• C) An increase in overdraft

• D) An increase in trade receivables

Which of the following is most likely to be the cause of a favourable raw material budget variance?

• A) A short supply of raw materials

• B) An increase in labour turnover

• C) An increase in labour hours

• D) An increase in employee training

Working capital is the difference between

• A) Revenue and total costs

• B) Current assets and current liabilities

• C) Revenue and costs of sales

• D) Non-current assets and non-current liabilities

A public limited company has a debenture for £100,000. This will be shown on the company's statement of financial position as a:

• Non-current assets

• Current liability

• Current asset

• Non-Current liability