Question 78 Chapter 4 of +2-B - USHA Publication 12 Class

Question 78 Chapter 4 of +2-B

Table of Contents

The solution of Question 78 Chapter 4 of +2-B: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

78. (Effect of Transactions on Operating Ratio) The operating ratio of a company 60%. State whether the following transactions will (a) increase, (b) decrease or (c) not change it :
(i) Sold goods for cash 10,000 (ii) Sold building 2,00,000.
(iii) Purchased goods 5,000 (iv) Paid salary 600.
(v) Sales return 500 (vi) Paid income tax 1,000.

The solution of Question 78 Chapter 4 of +2-B: –


Transactions	Effect on Operating ratio	Reason
(i) Sold goods for cash 10,000	Decrease	The number of Sales is to increase the cost of goods sold no change.

(ii) Sold building 2,00,000	No Effect	The building is not part of Net sales and Cost of goods sold.

(iii) Purchased goods 5,000	Increase	The cost of goods sold will increase by the purchase of goods.

(iv) Paid salary 600	Increase	Operating expenses are increased because it is part of operating expenditure.

(v) Sales return 500	Increase	Net Sales of the company are decreased with sales returns.

(vi) Paid income tax 1,000	No Effect	This no effect on operating expenses and Net sales.