Commerceatease

Login

MCQs on Analysis of Financial Statements

By /

MCQs on Analysis of Financial Statements

Question 21:

Which of the following is not a limitation of ‘Analysis of Financial Statements’?

  1. It is just a study of the reports of the company.
  2. It does not consider price level changes.
  3. *It ascertains the relative importance of different components of the financial position of the firm.
  4. It may be misleading without the knowledge of the changes in accounting procedures followed by a firm.

Question 22:

Ratios that are calculated for measuring the efficiency of operations of business based on effective utilization of resources are known as:

  1. Liquidity ratios
  2. *Turnover ratios
  3. Solvency ratios
  4. Profitability ratios

Question 23:

Sale of patents of ₹50,00,000 will result in:

  1. Cash inflow of ₹50,00,000 from financing activities
  2. Cash outflow of ₹50,00,000 from financing activities
  3. Cash outflow of ₹50,00,000 from investing activities
  4. *Cash inflow of ₹50,00,000 from investing activities

Question 24:

Income tax paid is classified under:

  1. *Operating activities
  2. Investing activities
  3. Financing activities
  4. Cash and cash equivalents

Question 25:

A company had following balances in their books of Accounts at the end of the current year and previous year respectively: Raw Material ₹40,000 and ₹30,000, Work in Progress ₹1,00,000 and ₹1,40,000, Finished Goods ₹70,000 and ₹1,00,000, Stock in Trade ₹2,00,000 and ₹1,20,000. Determine the amount of Change in Inventories to be shown in Statement of Profit and Loss Account.

  1. ₹ 20,000
  2. ₹ 10,000
  3. *₹ (10,000)
  4. ₹ (20,000)

 Question 26:

Inventory Turnover Ratio of company was 5 times. The firm had Revenue from operations of ₹ 5,00,000 and Gross Profit was 25% of Cost of Revenue from Operations. Determine the amount of Opening Inventory if Closing Inventory was ₹ 60,000.

  1. ₹ 50,000
  2. ₹ 80,000
  3. ₹ 60,000
  4. *₹ 1,00,000

Question 27:

Assertion (A) :- Gross Profit Ratio is always higher than Net Profit Ratio.

Reason (R) :- To calculate Net Profit, Indirect Expenses are subtracted from Gross Profit and Indirect Incomes are added to Gross Profit.

  1. Both A and R are correct, and R is the correct explanation of A
  2. Both A and R are correct, but R is not the correct explanation of A
  3. A is correct but R is incorrect
  4. *A is incorrect but R is correct

Question 28:

Proposed Dividend for the year ended March 31, 2025 and March 31, 2024 were ₹ 2,50,000 and ₹ 2,00,000 respectively. Shareholders finalised the dividend amount at ₹ 1,80,000 during the year ended March 31, 2025 in AGM held in June-July 2024. Unclaimed dividend as at March 31, 2025 was ₹ 10,000. Choose the correct option while preparing Cash Flow Statement for the year ended March 31, 2025:

  1. *Proposed Dividend added in Net Profit after tax will be ₹ 1,80,000 and outflow of Dividend paid in financing activities will be ₹ 1,70,000.
  2. Proposed Dividend added in Net Profit after tax will be ₹ 2,00,000 and outflow of Dividend paid in financing activities will be ₹ 1,90,000.
  3. Proposed Dividend added in Net Profit after tax will be ₹ 2,50,000 and outflow of Dividend paid in financing activities will be ₹ 2,00,000.
  4. Proposed Dividend added in Net Profit after tax will be ₹ 1,80,000 and outflow of Dividend paid in financing activities will be ₹ 1,90,000.

Question 29:

Provision for Tax for the year ended March 31, 2025 and 31 March 2024 were ₹ 3,00,000 and ₹ 2,80,000 respectively. During the year Tax paid was ₹ 2,50,000. Determine the amount of Tax proposed during the year by the firm.

  1. ₹ 2,30,000
  2. *₹ 2,70,000
  3. ₹ 2,80,000
  4. ₹ 3,00,000

Question 30:

Which of the following is cash flow from Operating activities for a finance company:

  1. Conversion of debentures into shares
  2. Building purchased
  3. *Dividend received
  4. Dividend paid

MCQs on Partnership Accounting Class 12

MCQs on Company Accounts Class 12

Pages: 1 2 3