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'Net Asset Turnover… (Class 12 Accountancy 2026, Q33a)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/5/1 · 4 marks · Long answer

CBSE Class 12 Accountancy 2026: question 33(a)

Set in the CBSE Class 12 board exam of 2026, paper 67/5/1, section B-I, question 33(a), for 4 marks. Try it first; the hints and our step-by-step solution are below.

Q33(a) · 4 marks · Long answerAccounting Ratios

'Net Asset Turnover ratio' of a company is 2 times. State with reason whether the following transactions will increase, decrease or not affect the ratio :
(i) Cash sales ₹ 3,00,000
(ii) Issue of equity shares ₹ 10,00,000
(iii) Issue of 9% debentures ₹ 5,00,000
(iv) Credit purchase of goods ₹ 50,000

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/5/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Write down the numerator and denominator of the ratio.

Hint 2

Capital employed = shareholders' funds + non-current liabilities = net assets.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Net asset (capital employed) turnover = revenue from operations / capital employed.

  2. (i) Cash sales ₹ 3,00,000 raise revenue from operations; capital employed is unchanged. Increase.

    1 mark

  3. (ii) Issue of equity shares ₹ 10,00,000 raises capital employed; revenue is unchanged. Decrease.

    1 mark

  4. (iii) Issue of 9% debentures ₹ 5,00,000 raises capital employed (long-term funds); revenue is unchanged. Decrease.

    1 mark

  5. (iv) Credit purchase of goods affects neither revenue from operations nor capital employed (current assets and current liabilities rise equally). No effect.

    1 mark

Answer: (i) Increase (ii) Decrease (iii) Decrease (iv) No effect

Where the marks are

  • Each transaction with reason (1 mark each)

Revise the chapter

  • Chapter: Accounting Ratios (notes, formulas, where marks are lost and every past question)
Practise this chapterBoard-style questions from Accounting Ratios, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 67/5/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.