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Target Exam

CUET

Subject

-- Accountancy Part B

Chapter

Accounting Ratios

Question:

Read the following passage and answer the question.

ABC Ltd has a business of shoes in New Delhi. From the last year, profits of the company has reduced so the company wants to know the earning capacity and liquidity position of its company so that it can take correct measures. Following information is available to the company.

1) Cash revenue from operations was 1/3rd of total revenue from operations
2) Cash revenue from operations was ₹1,40,000
3) Cash purchase was 25% of credit purchase
4) Cash purchase was ₹50,000
5) Opening inventory ₹30,000
6) Closing inventory was ₹10,000 more than opening inventory
7) Carriage inwards is ₹12,000 & Non current liabilities is ₹80,000
8) Total assets is ₹8,00,000 & fixed assets is ₹5,40,000
9) Non-current investments ₹1,10,000 & Shareholders funds ₹6,00,000

 

What is the total revenue from operations?

Options:

₹4,20,000

₹5,20,000

₹4,50,000

₹5,50,000

Correct Answer:

₹4,20,000

Explanation:

The correct answer is option 1- ₹4,20,000.

Cash revenue from operations was 1/3rd of total revenue from operations.

So, If cash revenue from operations = ₹1 then total revenue from operations will be ₹3
If cash revenue from operations is ₹1,40,000, So the Total revenue from operations will be 1,40,000 X 3 = ₹4,20,000.

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