Question 1

Which of the following are Non-current assets?&#10;A)land, building and plant&#10;B)leasehold property&#10;C)computer software&#10;D)all of the above

Accepted Answer

Non-current assets are long-term investments and properties a company owns that are not expected to be converted into cash within a year. Land, buildings, plant, leasehold property, and computer software (if intended for long-term use) all fall under the category of non-current assets.

Question 2

Financial statements are ____________.&#10;A)anticipated facts&#10;B)recorded facts&#10;C)estimated of facts&#10;D)unknown facts

Accepted Answer

Financial statements are recorded facts because they are based on actual transactions and events that have occurred.

Question 3

Trend analysis is significant for ____________.&#10;A)forecasting and budgeting&#10;B)profit planning&#10;C)capital rationing&#10;D)working capital management

Accepted Answer

profit planning&#10;

Question 4

In common size income statement analysis, which is taken as 100 percent?&#10;A)sales&#10;B)cost of goods sold&#10;C)purchases&#10;D)total assets

Accepted Answer

In common size income statement analysis, sales (or total revenue) is taken as 100 percent. This allows for the analysis of each line item as a percentage of total sales, facilitating comparison across different periods or companies regardless of size.

Question 5

Comparative statement analysis sheet is __________.&#10;A)vertical analysis&#10;B)horizontal analysis&#10;C)either vertical or horizontal analysis&#10;D)neither vertical nor horizontal analysis

Accepted Answer

Comparative statement analysis sheet is used for horizontal analysis, which involves comparing financial data over multiple periods to identify trends and growth patterns.

Question 6

Financial statements are meaningful and useful only when they are ___________.&#10;A)verified&#10;B)presented to owners&#10;C)analyzed and interpreted&#10;D)published

Accepted Answer

Financial statements become meaningful and useful when they are analyzed and interpreted, as this process helps in understanding the financial health, performance, and position of a business.

Question 7

Vertical analysis is made on the basis of __________.&#10;A)single set of financial statements&#10;B)multiple sets of financial statements&#10;C)different schedules attached to financial statements&#10;D)similar set of financial statements

Accepted Answer

Vertical analysis is performed on a single set of financial statements, where each line item is listed as a percentage of another item (typically, sales for the income statement and total assets for the balance sheet), allowing for the analysis of relative sizes and proportions within that single set of financial statements.

Question 8

Horizontal analysis is done by analyzing ____________.&#10;A)quarterly statement&#10;B)half yearly statement&#10;C)financial statements of several years&#10;D)financial statements of a particular year

Accepted Answer

The answer of Horizontal analysis is done by analyzing ____________.&#10;A)quarterly...

Question 9

When the concept of ratio is defined in respect to the item shown in the financial statements, it is termed as&#10;A)accounting ratio&#10;B)financial ratio&#10;C)costing ratio&#10;D)none of the above

Accepted Answer

Financial ratios are calculations used to assess the performance and financial health of a company by using numbers found in financial statements.

Question 10

The relationship between two financial variables can be expressed in:&#10;A)pure ratio&#10;B)percentage&#10;C)rate or time&#10;D)all the above

Accepted Answer

The relationship between two financial variables can be expressed in various ways, including a pure ratio (which compares two quantities), a percentage (which represents a part per hundred), and a rate or time (which often involves comparing changes over time or speed of transactions). Therefore, all the options provided are correct ways to express the relationship between two financial variables.

Question 11

Stock is considered as a liquid asset as anytime it can be converted into cash immediately.&#10;A)yes&#10;B)no&#10;C)only yes&#10;D)none of the above

Accepted Answer

The answer of Stock is considered as a liquid asset...

Question 12

Return on properties funds is also known as.&#10;A)return on net worth&#10;B)return on shareholders fun&#10;C)return on the shareholders' investment&#10;D)all of the above

Accepted Answer

The answer of Return on properties funds is also known...

Question 13

What will be the Gross Profit if , total sales is Rs 2,60,000,cost of net goods sold is Rs 2,00,000 & sales return is Rs10,000 ?&#10;A)13 %&#10;B)28%&#10;C)26%&#10;D)20%

Accepted Answer

The answer of What will be the Gross Profit if...

Question 14

Which of the following is not included in current assets.&#10;A)debtors&#10;B)stock&#10;C)cash at bank&#10;D)cash in hand

Accepted Answer

The answer of Which of the following is not included...

Question 15

Liquidity ratios are expressed in&#10;A)pure ratio form&#10;B)percentage&#10;C)rate or time&#10;D)none of the above

Accepted Answer

The answer of Liquidity ratios are expressed in&#10;A)pure ratio form&#10;B)percentage&#10;C)rate...

Question 16

Working capital turnover ratio can be determined by :&#10;A)( gross profit / working capital )&#10;B)( cost of goods sold / net sales )&#10;C)( cost of goods sold / working capital)&#10;D)none of the above

Accepted Answer

The answer of Working capital turnover ratio can be determined...

Question 17

Determine Working capital turnover ratio if, Current asset is Rs 1,50,000, current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000.&#10;A)5 times&#10;B)6 times&#10;C)3 times&#10;D)1.5 times

Accepted Answer

The answer of Determine Working capital turnover ratio if, Current...

Deck 3: Financial Statement Analysis and Ratios: Part A