This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 7 Financial Statements Of Companies – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 11 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Calculate the amount for current liabilities.Land $ 1 000 5 year loan $ 10 000 Trade payables $ 6 000Bank overdraft $ 700 A) $ 11 000. B) $ 16 000. C) $ 16 700. D) $ 6 700. Show Answer Correct Answer: D) $ 6 700. 2. Expenses allowed on issue of shares appears in a Company's Balance Sheet under: A) Share Capital. B) Current Liability. C) Unamortized Expenditure. D) Contingent Liability. Show Answer Correct Answer: C) Unamortized Expenditure. 3. A business operates on a gross profit margin of 33$^{1}$/$_{3}$%. Gross profit on a sale was $ 800, and expenses were $ 680.What is the net profit margin? A) 3.75%. B) 5%. C) 11.25%. D) 22.67%. Show Answer Correct Answer: B) 5%. 4. 'claims against company not acknowledged as debt' is shown under A) Current liability. B) Contingent liability. C) Non current liability. D) Capital commitment. Show Answer Correct Answer: B) Contingent liability. 5. What is the meaning of Profit for the year? A) Is the overall final money earned from operating the business. B) Is the overall final income earned from operating the business. C) Is the overall final position earned from operating the business. D) Is the overall final profit earned from operating the business. Show Answer Correct Answer: D) Is the overall final profit earned from operating the business. 6. What is the purpose of the Statement of Financial Position? A) Inform stakeholders the assets and liabilities of business. B) Provides information on how resources are obtained and used and the claim by the owner on the net assets of the business at a point in time. C) Provides information on how resources are obtained and used in the business at a point in time. D) Inform stakeholders the owner's equity of business. Show Answer Correct Answer: B) Provides information on how resources are obtained and used and the claim by the owner on the net assets of the business at a point in time. 7. At the end of his first year of trading, Rashid provided the following information.Revenue $ 72, 500; Purchases $ 49, 700;Closing inventory $ 4, 800; Carriage inwards $ 1, 150; Carriage outwards $ 2, 950What was Rashid's gross profit? A) $ 22, 800. B) $ 24, 650. C) $ 26, 450. D) $ 27, 600. Show Answer Correct Answer: C) $ 26, 450. 8. Expense for hiring the place of sales A) Rates. B) Shop rent. C) Insurance. D) Interest. Show Answer Correct Answer: B) Shop rent. 9. 15% Debentures in the companies balance sheet is shown under the sub-head A) Long term provisions. B) Other current liabilities. C) Long term borrowings. D) Other long term liabilities. Show Answer Correct Answer: C) Long term borrowings. 10. Imagine you're in a business class with Olivia, Samuel, and Luna. The teacher asks, 'What is the purpose of a statement of retained earnings?' How would you answer? A) To track a company's expenses. B) To show the changes in a company's retained earnings over a specific period of time. C) To calculate a company's net income. D) To determine a company's cash flow. Show Answer Correct Answer: B) To show the changes in a company's retained earnings over a specific period of time. 11. What is the accounting equation used in the Statement of Financial Position? A) Total assets = Total Income + Equity. B) Total assets = Total Loan + Equity. C) Total assets = Total liabilities + Equity. D) Total assets = Total Liabilities-Equity. Show Answer Correct Answer: C) Total assets = Total liabilities + Equity. 12. If the tax paid is greater than the tax expense, the amount of tax which has overpaid is known as: A) Tax recoverable. B) Tax payable. C) All the above. D) None of the above. Show Answer Correct Answer: A) Tax recoverable. 13. Balance sheet contains which of the following information A) Assets. B) Debtors. C) Journal. D) Creditors. Show Answer Correct Answer: A) Assets. 14. "Assets = Liabilities + Equity" can be displayed on which financial statement? A) Balance Sheet. B) Income Statement. C) Statement of Owner's Equity. D) Neither. Show Answer Correct Answer: A) Balance Sheet. 15. Which of the following transactions would result in an increase in capital employed? A) Selling inventory at a profit. B) Writing off a bad debt. C) Paying a payable in cash. D) Increasing the bank overdraft to purchase a non-current asset. Show Answer Correct Answer: A) Selling inventory at a profit. 16. Which of the following includes ONLY Current Liabilities include A) Trademark, creditors, mortgage. B) Bank overdraft, mortgage, bank loan. C) Short-term loan, creditors, bank overdraft. D) Cash in hand, bank balance, short term loan. Show Answer Correct Answer: C) Short-term loan, creditors, bank overdraft. 17. What is the cash flow statement used for? A) To show the cash inflows and outflows over a period of time. B) To provide a breakdown of a business's marketing expenses. C) To give investors and lenders an understanding of a business's financial health. D) To track the number of employees in a business. Show Answer Correct Answer: A) To show the cash inflows and outflows over a period of time. 18. The detailed and accurate type of analysis done by the management of the enterprise to determine the financial position and operational efficiency of the organization is known as ..... A) External Analysis. B) Static Analysis. C) Horizontal analysis. D) Internal analysis. Show Answer Correct Answer: D) Internal analysis. 19. Why financial statements might underestimate the value of a business, for instance for startups with intellectual property? A) They do not account for inflation. B) They do not include tangible assets. C) They immediately expense intangible asset expenditures and do not record them as assets. D) They only cover a specific period of time. Show Answer Correct Answer: C) They immediately expense intangible asset expenditures and do not record them as assets. 20. Ethan, Michael, and James are running a lemonade stand. They are trying to calculate their net income. Can you help them figure out the correct formula? A) Total revenue + Total expenses. B) Total revenue-Total expenses. C) Total revenue x Total expenses. D) Total revenue / Total expenses. Show Answer Correct Answer: B) Total revenue-Total expenses. 21. "For Month Ended" is used on a heading when ..... A) Always. B) Never. C) The statement is a summary report. D) The statement is temporary. Show Answer Correct Answer: C) The statement is a summary report. 22. Which of the following statement(s) is/are true?If the turnover of Pind Co increased by 20%, the asset turnover would increaseby 20%.If Pind co has a different depreciation policy to its competitors, the assetturnover ratio will not be comparable. A) (1) only. B) (2) only. C) Both (1) and (2). D) Neither (I) nor (2). Show Answer Correct Answer: C) Both (1) and (2). 23. Would you prefer a credit card with? A) A higher interest rate. B) A lower interest rate. C) All the above. D) None of the above. Show Answer Correct Answer: B) A lower interest rate. 24. 'Accumulated Dividend Arrears' on preference shares is shown in the Company's Balance Sheet as: A) Current Liability. B) Contingent Liability. C) Commitments. D) Short-term Provision. Show Answer Correct Answer: C) Commitments. 25. When revenue > expenses, then there is a A) Net Loss. B) Mistake in the math. C) Net Income. D) Transposition error. Show Answer Correct Answer: C) Net Income. ← PreviousNext →Related QuizzesClass 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 1Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 2Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 3Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 4Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 5Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 6Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 7Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 8Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 9Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books