A high Inventory Turnover Ratio generally indicates: MCQ with Answer and Explanation

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A high Inventory Turnover Ratio generally indicates:

A. Low sales volume

B. Efficient inventory management and fast sales

C. Overstocking

D. Slow-moving inventory

Answer: Option B

Solution (By JKSSB Mock Tests)

It means the company replenishes and sells its inventory quickly, pointing to strong sales and efficient management.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The penalty for late filing of GSTR-3B is:

A. ₹100 per day

B. ₹50 per day (₹25 CGST + ₹25 SGST)

C. ₹200 per day

D. ₹500 per day

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Correct Answer: Option B

Explanation:
Late fee is ₹50 per day (₹25 CGST + ₹25 SGST) for normal returns.

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Question #2

A: The Current Ratio is a liquidity ratio. R: It measures the ability to pay off long-term debts. Choose the correct option.

A. A is true but R is false

B. Both A and R are true but R is NOT the correct explanation of A

C. A is false but R is true

D. Both A and R are true and R is the correct explanation of A

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Correct Answer: Option A

Explanation:
The Current Ratio is indeed a liquidity ratio. However, it measures short-term liquidity (ability to pay current liabilities), not long-term debts (which is measured by solvency ratios like Debt-Equity). A is true, R is false.

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Question #3

The 'Goods and Services Tax' on services provided by a director to a company is:

A. Always exempt

B. Taxable under reverse charge if the director is not an employee

C. Exempt

D. Not treated as supply

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Correct Answer: Option B

Explanation:
Services provided by a non-executive director are taxable under RCM.

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