Class 12 Accountancy MCQs Financial Statements Analysis
All questions are based on examination for practice by the students to prepare for final exams. Note your speed and accuracy to score high in board exam.
Financial Statements and Financial Analysis MCQs
- In the balance sheet of a company, preliminary expenses are shown under:
a) Shareholders Fund
b) Non –current Liabilities
c) Current Liabilities
d) None of the above
2. ‘Freedom to Choose method of depreciation’ refers to which limitation of financial statement analysis.
a) Historical analysis
b) Qualitative aspect ignored.
c) Not free from bias.
d) Ignore Price level Changes.
3. Which of the following is not an objective of Analysis of financial statements?
a) To judge the financial health of the firm
b) To judge the short term and long-term liquidity position of the firm
c) To judge the reason for change in the profitability of the firm
d) To judge the variations in the accounting practices of the business followed by different enterprises
4. Financial statements are prepared on certain basic assumptions like:
a) Postulates
b) Provision of Companies Act, 2013
c) Accounting Standards
d) Basis of Accounting
5. Bank overdraft and Cash Credit are shown under which head in the company's Balance Sheet:
a) Current Assets
b) Non-current Liabilities
c) Short-term Borrowings
d) Cash Equivalents
6. Which of the following objective of Financial Analysis indicates the efficiency with which Resources are utilised in generating revenue:
a) To determine Liquidity
b) To determine Long-term Solvency
c) To determine Profitability
d) To determine Operating Efficiency
7. Which of the following is not a limitation of analysis of financial statements?
a) Price level changes ignored
b) Subjectivity
c) Intra firm comparison possible
d) Window Dressing
8. A statement of Assets (Current and Non-Current), Liabilities (Current and Non- current) and Equity indicating the financial position of an enterprise at a given date is known as:
a) Income Statement
b) Balance Sheet
c) Cash Flow Statement
d) Funds Flow Statement
9. Which analysis is considered as dynamic?
a) Horizontal Analysis
b) Vertical Analysis
c) Internal Analysis
d) External Analysis
10. Which Analysis is based on one year’s data?
a) Horizontal Analysis
b) Vertical Analysis
c) Cash Flow Statement
d) Dividend Analysis
Class 12 Accountancy MCQs Financial Statements Analysis
11. Which of the following is tool of financial analysis?
a) Comparative statement
b) Common size statements
c) Cash flow statement
d) All of these
12. Assertion - Financial statement analysis is Undertaker by investors, landers and creditors for assessing the safety of the amount invested in the company.
Reason - investors, landers and creditors Undertaker the financial statement analysis because they have invested their money in the company and have either indirect control or no control on the affair of the company.
In the context of above two statements which of the following is correct?
a) Assertion and reason are correct but the reason is not the correct explanation of Assertion
b) Both Assertion and reason are correct and the reason is the correct explanation of Assertion.
c) Only Assertion is correct.
d) Assertion is not correct but the reason is the correct.
More questions will be added from time to time...
Class 12 Accountancy MCQs Financial Statements Analysis - Answers
- d) None of the above
- c) Not free from bias.
- d) To judge the variations in the accounting practices of the business followed by different enterprises
- a) Postulates
- c) Short-term Borrowings
- d) To determine Operating Efficiency
- c) Intra firm comparison possible
- b) Balance Sheet
- a) Horizontal Analysis
- b) vertical Analysis
- d) All of these
- b) Both Assertion and reason are correct and the reason is the correct explanation of Assertion
Class 12 Accountancy MCQs Debentures