Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 12 (9 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. Expense on transportation of purchases

Correct Answer: C) Cartage on goods purchased.

2. ..... appear in a Company's Balance Sheet under the Sub-head Short-term Provision

Correct Answer: B) Provision for Tax.

3. Every financial statement has a heading that indicates the name of the company, title of the report, and the date.

Correct Answer: A) True.

4. How can you interpret a company's financial performance using Financial Statements?

Correct Answer: D) Analyze key financial ratios such as profitability, liquidity, solvency, and efficiency ratios.

5. Which from the list below can't be used to calculate the liquidity of a business?

Correct Answer: D) Mark-up achieved.

6. Why are financial statements of different companies not always comparable?

Correct Answer: B) They use different accounting practices.

7. Which current ratio will be the most favourable for a company?

Correct Answer: B) 2.2:1.

8. Which of the following is a disadvantage of the financial statements.

Correct Answer: C) Chance of manipulation in the report for obtaining debt that the organization cannot payback.

9. What does the balance sheet show?

Correct Answer: C) What a business owns and what it owes.