BUSINESS ECONOMICS AND FINANCIAL ANALYSIS

B. Tech III YEAR I SEMESTER

II MID Important Questions

1. Explain different types of Markets ?

2. List out and explain concepts of accounting ?
3. Total Fixed Cost 90,000/- Variable Cost per unit 26/- Sales Price per unit 42/- calculate
a) Break even sales in units b) P/V Ratio

4. Explain Importance of Break Even Analysis. with Graphical representation?

5. Define Ratio's? Explain Importance of Ratio's?

6. Journalize the following transactions

Jan 1. Commenced business with a capital of Rs. 100000

,, 2. Purchased Furniture for cash Rs. 3000
,, 3. Purchased goods Rs. 5000
,, 4. Sold goods for cash to Pavani Rs. 1000
,, 5. Purchased goods from Sudha Rs.2000
,, 18. Paid for Advertising. Rs. 1000
,, 20. Received interest Rs. 500
,, 24. Paid insurance premium Rs. 200
,, 30. Paid salary Rs.1000

7.Explain the important features of Perfect Market?

8.Explain briefly about journal, ledger and Trial balance with its formats.
9.The following Trading and Profit and Loss Account of Fantasy Ltd. for the year 31‐3‐2021 is
given below:

Particular Amount Particular Amount

(in Rs) (in Rs)
To Opening Stock 76,250 By Sales 5,00,000
To Purchases 3,15,250 By Closing stock 98,500
To Carriage and Freight 2,000
To Wages 5,000
To Gross Profit 2,00,000

5,98,500 5,98,500

To Administration expenses 1,01,000 By Gross Profit b/d 2,00,000

To Selling and Dist. expenses 12,000 By Interest on Securities 1,500
To Non‐operating expenses 2,000 By Dividend on shares 3,750
To Financial Expenses 7,000 By Profit on sale of shares 750
To Net Profit 84,000
2,06,000 2,06,000
Calculate: 1. Gross Profit Ratio 2. Net Profit Ratio
UNIT- III

Fill in the blanks:

1. The place or a point at which buyers and sellers negotiate the terms of purchase or sale is
called ______________
2. The Market with few sellers is called ___________.
3. In a _____________ competition, the product is similar but not identical.
4. The market with a single buyer is called ____________.
5. A market in which there is a freedom of entry and exit for the traders is called
__________.
6. _________________pricing refers to where the price is fixes on the basis of the
perception of the buyer of the value of the product.
7. Cost Plus pricing is also called as _____________ pricing.
8. Tenders are based on _______ pricing.
9. ___________ pricing is where the company operates with a targeted profit in mind.
10. __________ refers to a situation where a single firm is in a position to control either
supply or price of a product or service.

Multiple choose Questions:

1. The structure of the market is not based on _______ ( )

a) Degree of seller concentration b) Degree of buyer concentration

c) Degree of product Differentiation d) Condition of Exit from the market

2. Perfect competition is based on _________ ( )

a) Few number of buyers and sellers b) Heterogeneous products and service

c) Each firm is a price maker d) Perfect mobility of factors of production

3. If the __________ is the degree of product differentiation, the more is the power to
control the price. ( )

a) Lower b) Lesser c) Greater d) Least

4. Identify the objectives of pricing from the following ( )

a) To maximize the profits b) To increase the sales

c) To increase the market value d) All of the above

5. ____________is one of the Imperfect market ( )

a) Monopoly b) Duopoly c) Oligopoly d) None of the above

6. The nature of demand curve in monopoly is________

a) Perfect elastic b) Unit elastic c) Inelastic d) None of the above

7. The price discrimination is also called as__________

a) Standard pricing b) preferential pricing

 c) Differential pricing d) none of the above

8. Price in long run is called_________________

a) Standard price b) Retail price c) Market price d) Normal price

9. Under perfect competition, the price is equal to ___________

a) AR=MR b) AR > MR c) MR > AR d) MR not equal to AR

10. Perfect competition is based on___________

a) Few numbers of buyers & sellers b) Heterogeneous products & services

c) Each firm is a price maker d) perfect mobility of factors of production

UNIT – IV

Fill in the blanks:

1. Accounting helps to________________________

2. Managers use accounting information to report to_________________
3. The financial statements comprise_____________________
4. ______________is the first book of original entry
5. _________concept explain that the firm has long life.
6. _____________gives the arithmetic accuracy of the transaction
7. _____________system involves “for every debit, there is a corresponding credit”
8. The difference between assets and liabilities is called_____________.
9. The _______________concept explain the organization from is separate from its
investors.
10. The excess of current assets over the current liabilities ______________

Multiple choose Questions

1. The financial statement comprise

a) Trading Account, Balance Sheet b) Balance Sheet, Ledger

c) Journal, Ledger d) Trading account, profit &loss Account, Balance Sheet

2. The moment transactions take place in business, they are recorded in

a) Ledger b) Trial balance c) Journal d) Final accounts

3. Goods or money used for personal purpose is an example for

a) Net sales b) Net purchases c) Drawings d) Capital

4. Purchases book records

a) Cash purchases b) Credit purchases c) Goods bought d) Goods

5. Building is an example for

a) Capital expenditure b) Assets c) Loan d) Liability account

6. Rent paid in advance is

a) Real account b) Personal account c) Capital Account d) None of the above

7. Which of the following is also called Return Inwards?

a) Net purchases b) Net sales c) Sales Returns d) Purchases returns

8. On the basis of balance shows by ledger accounts, which o the follow in is prepared?

a) Balance sheet b) Trail balance c) Journal d) Final account

9. Which of the following can reveal some errors that creep in the accounts?

a) Ledger b) Double-entry system c) Trial balance d) Journal

10. Which of the following is not sub-set of accounting?

a) Book keeping b) Financial accounting c) Cost accounting d) Management accounting

UNIT – V

Fill in the blanks

1. Current ratio= __________

2.____________ express the liability of the firm to meets its short term commitments as and
when they are due.

3. Quick ratio = __________________

4. Inventory turnover Ratio is also called ______________

5._____________reveals the number of times the average debtors are collected during a given
accounting period.

6. Debt collection period = _________________

7. Capital structure or leverage ratio is defined _________________

8. `_________ is the ratio between cost of goods sold plus operating expenses and net sales

9. _____________is the relationship between net profits and number of shares outstanding at the
end of the given period.

10. Price /Earnings Ratio= ___________________

Multiple choose Questions

1. Which would a business be most likely to use its solvency?

a) Gross profit ratio b) Debtors collection period c) Current ratio d) Debt-equity ratio

2) Liquidity ratios are expressed in

a. pure ratio form b. Percentage c. Rate or time d. None
3. The ideal level of liquid ratio is
a. 3:3 b. 4:4 c. 5:5 d. None of the above

4. When the concept of ratio is defined in respected to the items shown in the financial
statements, it is termed as
a) Accounting ratio b) Financial ratio c) Costing ratio d) None of the above.

5. Profit for the objective of calculating a ratio may be taken as

a) Profit before tax but after interest b) Profit before interest and tax
c) Profit after interest and tax d) All of the above.

6. In -----------------figures of two or more periods are placed side by side to facilitate easy and
meaningful comparison

a). Common‐size statement analysis b). Comparative statement analysis

c). Trend percentage analysis d). None

7. The technique of converting figures into percentage in some common base is called

a). Ratio analysis b). Common size statement analysis

c) Trend percentages d). None

8. Which of the following is useful to see if fixed assets are used efficiently in business?

a) Gross profit ratio b) Debtors collection period

c) Current ratio d) Assets turnover ratio

9. A company return on investment indicates

a) Solvency b) Stock turnover

c) Profitability d) Debtor collection

10. Which of the following measures company’s current assets-stock/current liabilities

a) Acid test ratio b) Current ratio

c) Debtor collection period d) Stock turnover ratio