Question 1

&#8230;&#8230;&#8230;&#8230;&#8230;..type of analysis is based on the data from year to year rather than on one date, and also termed as dynamic analysis.&#10;A)internal analysis&#10;B)horizontal analysis&#10;C)external analysis&#10;D)none of these

Accepted Answer

Horizontal analysis, also known as trend analysis, is based on data from year to year and is considered a dynamic analysis because it evaluates financial statements over multiple periods to identify trends and growth patterns.

Question 2

&#8230;&#8230;&#8230;&#8230;.analysis is useful in comparing performance of several companies in the same group, or division or department of the same company.&#10;A)vertical analysis&#10;B)horizontal analysis&#10;C)external analysis&#10;D)none of these

Accepted Answer

Vertical analysis is useful in comparing performance of several companies in the same group, or division or department of the same company.

Question 3

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;. are prepared so as to provide time perspective to the consideration of various elements of financial position embodied in such statements.&#10;A)comparative statements&#10;B)common size statements&#10;C)both of these&#10;D)none

Accepted Answer

Comparative statements are prepared to provide a time perspective by comparing financial data across different periods, allowing for analysis of trends and changes in financial position.

Question 4

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.are the statements, in which figures reported are converted into percentages to some common base.&#10;A)comparative statements&#10;B)common size statements&#10;C)both of these&#10;D)none

Accepted Answer

Common size statements are financial statements in which all line items are expressed as a percentage of a common base figure. This allows for easier comparison across periods or companies.

Question 5

The term fixed assets includes&#10;A)stock in trade&#10;B)furniture&#10;C)payments in advance&#10;D)all of these

Accepted Answer

Fixed assets are long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash in the short term. Furniture is an example of a fixed asset because it is used over a long period in the operations of a business. Stock in trade and payments in advance are not considered fixed assets; stock in trade is considered inventory, and payments in advance are considered prepaid expenses or other current assets.

Question 6

The following is a recorded fact&#10;A)market value of investment&#10;B)debtors&#10;C)replacement cost&#10;D)none

Accepted Answer

Debtors are recorded facts as they represent amounts owed to a business by its customers, which are documented in financial records.

Question 7

The term current assets does not include&#10;A)payment in advance&#10;B)bills receivable&#10;C)long term deferred charges&#10;D)none of these

Accepted Answer

Long-term deferred charges are not considered current assets because they are not expected to be converted into cash or used up within one year or the operating cycle, whichever is longer. Current assets typically include cash and other assets that are expected to be converted into cash, sold, or consumed within a year.

Question 8

In case of a limited company, the term financial statements includes&#8230;&#8230;&#8230;&#10;A)profit and loss account&#10;B)profit and loss account, profit and loss appropriation account and balance sheet&#10;C)balance sheet&#10;D)none

Accepted Answer

In the context of a limited company, financial statements typically include the profit and loss account, profit and loss appropriation account, and the balance sheet. These documents provide a comprehensive overview of the company's financial performance and position.

Question 9

Assets and liabilities in a Balance sheet may be arranged in the order of &#8230;..&#10;A)liquidity&#10;B)permanence&#10;C)both of these&#10;D)none of these

Accepted Answer

Assets and liabilities on a balance sheet can indeed be arranged in the order of liquidity (how quickly they can be converted into cash or paid) and permanence (how long they are expected to remain in the business). This helps in understanding the financial health and stability of a business.

Question 10

Income statement matches the &#8230;&#8230;&#8230;&#8230;&#8230; incurred in the accounting year&#10;A)revenue and costs&#10;B)incomes and expenses&#10;C)both of these&#10;D)none of these

Accepted Answer

The income statement matches both the revenue and costs as well as incomes and expenses incurred in the accounting year, reflecting the company's financial performance.

Question 11

&#8230;&#8230;&#8230;&#8230;..are statements of financial position at different periods&#10;A)comparative statements&#10;B)common size statements&#10;C)both of these&#10;D)none

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;..are statements of financial position at different...

Question 12

An increase in current asset accompanied by the increase in current liabilities of the same amount will&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)improve short term financial position&#10;B)not improve short term financial position&#10;C)improve long term financial position&#10;D)none of these

Accepted Answer

The answer of An increase in current asset accompanied by...

Question 13

Which among the following is an example for horizontal analysis ?&#10;A)comparative balance sheet&#10;B)comparative income statement&#10;C)common size statements&#10;D)a & b

Accepted Answer

The answer of Which among the following is an example...

Question 14

If the Gross sales of a concern is Rs.200000 and sales return is 20000, Gross profit is 150000.cost of goods sold is&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..&#10;A)150000&#10;B)30000&#10;C)50000&#10;D)none of these

Accepted Answer

The answer of If the Gross sales of a concern...

Question 15

Given opening stock is Rs.20000, Direct expenses 10000, Closing stock 5000.Cost of goods sold is &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)25000&#10;B)35000&#10;C)15000&#10;D)20000

Accepted Answer

The answer of Given opening stock is Rs.20000, Direct expenses...

Question 16

Ratio of Net sales to Net working capital is a &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..&#10;A)working capital turnover ratio&#10;B)profitability ratio&#10;C)liquidity ratio&#10;D)none of these

Accepted Answer

The answer of Ratio of Net sales to Net working...

Question 17

Observing changes in financial analysis across the years is &#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)vertical analysis&#10;B)horizontal analysis&#10;C)inter firm comparison&#10;D)none of these

Accepted Answer

The answer of Observing changes in financial analysis across the...

Question 18

Ratio of net profit before interest and tax to sales is &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.&#10;A)operating profit ratio&#10;B)operating ratio&#10;C)capital gearing&#10;D)solvency ratio

Accepted Answer

The answer of Ratio of net profit before interest and...

Question 19

The statistical yardstick that provides a measure of relationship between two accounting figures is &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)current ratio&#10;B)the accounting ratio&#10;C)input output ratio&#10;D)none of these

Accepted Answer

The answer of The statistical yardstick that provides a measure...

Question 20

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.is a statement which lists all the sources of funds and applications of funds taken place in a business during a particular period&#10;A)fund flow statement&#10;B)cash flow statement&#10;C)any of these&#10;D)none of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.is a statement which lists all the...

Question 21

The overall net increase or decrease in working capital is found out by preparing&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#10;A)fund flow statement&#10;B)cash flow statement&#10;C)statement showing changes in working capital&#10;D)none of these

Accepted Answer

The answer of The overall net increase or decrease in...

Question 22

Which one of the following is a source of fund ?&#10;A)issue of shares in consideration of machinery purchased&#10;B)issue of bonus shares&#10;C)issue of right shares&#10;D)issue of shares for cash

Accepted Answer

The answer of Which one of the following is a...

Question 23

Which among the following is a sources of fund ?&#10;A)sale proceeds of fixed assets&#10;B)sale proceeds of long term investments&#10;C)non operating incomes&#10;D)all of these

Accepted Answer

The answer of Which among the following is a sources...

Question 24

Which among the following is an application of fund ?&#10;A)purchase of long term investments&#10;B)redemption of preference shares&#10;C)redemption of debentures&#10;D)all of these

Accepted Answer

The answer of Which among the following is an application...

Question 25

&#8230;&#8230;&#8230;&#8230;&#8230;is only internal source of funds&#10;A)fund from operations&#10;B)net profit&#10;C)both of these&#10;D)none of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;&#8230;is only internal source of funds&#10;A)fund from...

Deck 2: Financial Analysis and Statements