Analysis of Financial Statements Set 1

Analysis of Financial Statements MCQs
[set-1]
Chapter: Financial Statement of Corporate Organisations
1. Business finance includes........

A. procurement of funds and utilization of funds
B. management of funds
C. allocation
D. insurance
Answer: A
2. Funds are required for the..........

o m
A. purchase of land & building
. c
B. purchase of machinery
te
C. purchase of another fixed asset a
D. all of the above
q M
Answer: D
c
M
3. Which report gives a review on the profitability of a business?
A. statement of changes in equity
B. cash flow statement
C. balance sheet
D. income statement
Answer: D
4. The term ‘Financial Statement’ covers

A. profit & loss statement
B. balance sheet and profit & loss statement appropriation account
C. profit & loss statement and balance sheet
D. all of above are false
Answer: C
5. Which of the following is true about financial statements?

A) Financial statement gives a summary of accounts. B) Financial statements can
be stated as
recorded facts.
A. only a
B. only b
C. both a and b
D. none of the above
Answer: C
6. P&L statement is also known as

A. statement of operations
B. statement of income
C. statement of earnings
D. all of the above
Answer: B
7. Which statement shows the flow of cash and cash equivalents during the
financial period?
A. statement of changes in equity
B. cash flow statement
C. balance sheet
D. income statement
Answer: B
8. Subtracting all expenses from revenues yields?

A. net profit / net loss
B. carrying value
C. long term assets
D. net liabilities
Answer: A
9. Balance sheet of a company is required to be prepared in the format given in

………………………
A. schedule iii part ii
B. schedule iii part i
C. schedule iii part iii
D. table a
Answer: B
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10. As per Companies Act, the Balance Sheet of a company is required to be
presented in ………………………
A. horizontal form
B. vertical form
C. either horizontal or vertical form
D. neither of the above
Answer: B
11. Which of the following is not required to be prepared under the Companies
Act?
A. statement of profit and loss
B. balance sheet
C. report of director’s and auditor’s
D. funds flow statement
Answer: D
12. According to prescribed order of assets in a Company’s Balance Sheet

……………………… assets should be shown first of all.
A. non-current assets
B. current assets
C. current investments
D. loans and advances
Answer: A
13. Calls in Arrears appear in a Company’s Balance Sheet under ………………..

A. reserve & surplus
B. shareholder’s funds
C. contingent liabilities
D. short-term borrowings
Answer: B
14. Calls in advance appear in a Company’s Balance Sheet under ………………..

A. share capital
B. current liability
C. long-term borrowings
D. reserve & surplus
Answer: B

15. Bills Receivables appear in a Company’s Balance Sheet under the Sub-head
……………………..
A. current investments
B. cash equivalents
C. trade receivables
D. short term loans and advances
Answer: C
16. Which of the following options is not recorded in the Balance sheet?
A. cash
B. rent expenses
C. building
D. goodwill
Answer: B
17. Which of the given area is NOT addressed by Business Finance?

A. financing
B. investing
C. managing day today expenses
D. none of the given options
Answer: D
18. Which of the following is measured by profit margin?

A. operating efficiency
B. asset use efficiency
C. financial policy
D. dividend policy
Answer: A
19. Business Finance addresses which of the following?

A. capital budgeting
B. capital structure
C. working capital management
D. all of the given options
Answer: D
20. Finance is vital for which of the following business activity (activities)?

A. marketing research
B. product pricing
C. design of marketing and distribution channels
D. all of the given options
Answer: D
21. Which of the following refers to the difference between the sale price and cost
of inventory?
A. net loss
B. net worth
C. markup
D. markdown
Answer: C
22. Who of the following make a broader use of accounting information?

A. accountants
B. financial analysts
C. auditors
D. marketers
Answer: B
23. Which of the following statement is considered as the accountant’s snapshot of

firm’s accounting value as of a particular date?
A. income statement
B. balance sheet
C. cash flow statement
D. retained earning statement
Answer: B
24. Balance Sheet is based upon which of the following formula?

A. assets = liabilities – stockholder’s equity
B. assets + liabilities = stockholder’s equity
C. assets + stockholder’s equity = liabilities
D. assets = liabilities + stockholder’s equity
Answer: D
25. The conflict of interest between stockholders and management is known as:
A. agency problem

B. interest conflict
C. management conflict
D. agency cost
Answer: A

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Analysis of Financial Statements MCQs

Chapter: Financial Statement of Corporate Organisations

1. Business finance includes........

2. Funds are required for the..........

4. The term ‘Financial Statement’ covers

5. Which of the following is true about financial statements?

6. P&L statement is also known as

8. Subtracting all expenses from revenues yields?

9. Balance sheet of a company is required to be prepared in the format given in

View all MCQ's at McqMate.com

12. According to prescribed order of assets in a Company’s Balance Sheet

13. Calls in Arrears appear in a Company’s Balance Sheet under ………………..

14. Calls in advance appear in a Company’s Balance Sheet under ………………..

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17. Which of the given area is NOT addressed by Business Finance?

18. Which of the following is measured by profit margin?

19. Business Finance addresses which of the following?

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22. Who of the following make a broader use of accounting information?

23. Which of the following statement is considered as the accountant’s snapshot of

24. Balance Sheet is based upon which of the following formula?

View all MCQ's at McqMate.com

View all MCQ's at McqMate.com

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