This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 7 Financial Statements Of Companies – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 4 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which account is classified as an Asset? A) Concert Tickets. B) Bank Account. C) Allowance. D) Bus Pass. Show Answer Correct Answer: B) Bank Account. 2. The following are types Of key performance indicators (KPIS):(i) Return on capital employed(ii) Gross profit percentage(iii) Acid test ratio(ivy Gearing ratioWhich of the above KPIs would be used to assess the liquidity Of a company? A) (i) and (ii). B) (iii) only. C) (iv) only. D) (iii) and (iv). Show Answer Correct Answer: B) (iii) only. 3. All of the following statements regarding the accounting period concept are correct, except for? A) It allows for comparisons from year to year, and with other businesses. B) Areas of concern can be identified and recommendations given. C) It assumes the lifetime of a business is indefinite. D) Most business complete financial statements at the end of each financial year, while others may also do this more regularly. Show Answer Correct Answer: C) It assumes the lifetime of a business is indefinite. 4. Calculate the amount for current liabilities.Fixtures $ 1 000 Loan $ 10 000 Trade payables $ 6 000Discount received $ 400 Bank overdraft $ 700 A) $ 11 000. B) $ 16 000. C) $ 16 700. D) $ 6 700. Show Answer Correct Answer: D) $ 6 700. 5. What is the cash method of accounting? A) Tracking the cash inflows and outflows of a business. B) Calculating the profitability of a business. C) Recognizing revenue when cash is received and recording expenses when cash is paid out. D) Recognizing revenue as it's earned and recording expenses as they are incurred. Show Answer Correct Answer: C) Recognizing revenue when cash is received and recording expenses when cash is paid out. 6. Charlotte, Evelyn, and Ethan are playing a game of 'Financial Wizards.' They need to identify the main components of a cash flow statement. Can you help them? A) Income statement, balance sheet, and statement of retained earnings. B) Sales activities, marketing activities, and production activities. C) Cash inflows, cash outflows, and cash reserves. D) Operating activities, investing activities, and financing activities. Show Answer Correct Answer: D) Operating activities, investing activities, and financing activities. 7. Define what Financial Ratios are and how they are used in analysis. A) Financial Ratios are used in analysis to evaluate a company's financial performance by analyzing relationships between different financial variables. B) Financial Ratios are used in analysis to predict future stock prices. C) Financial Ratios are used in analysis to measure the physical assets of a company. D) Financial Ratios are used in analysis to determine employee satisfaction levels. Show Answer Correct Answer: A) Financial Ratios are used in analysis to evaluate a company's financial performance by analyzing relationships between different financial variables. 8. Cash deposited into bank will result in ..... of cash A) Inflow. B) Outflow. C) No flow. D) All. Show Answer Correct Answer: C) No flow. 9. The typical set of financial statements of company consist of: A) SOPL and SOFP. B) SOCIE. C) SOCF. D) Notes to the financial statements. E) All the above. Show Answer Correct Answer: E) All the above. 10. Which of the following accurately represents the statement of financial position for a sole-trader? A) Assets = liabilities-capital. B) Capital = assets + liabilities. C) Assets = liabilities + capital. D) Liabilities = capital-assets. Show Answer Correct Answer: C) Assets = liabilities + capital. 11. A company's quick ratio has increased from 0.9:1 at 31 December 20X1 to 1.5:1 at 31 December 20X2. Which of the following events could explain this increase? A) Improved inventory control. B) The refinancing of a long-term loan. C) A reduction in payables. D) An increase in payables. Show Answer Correct Answer: C) A reduction in payables. 12. ALL Expenses A) Income Statement. B) Balance Sheet. C) All the above. D) None of the above. Show Answer Correct Answer: A) Income Statement. 13. Supplies, Prepaid Insurance, Petty Cash A) Income Statement. B) Balance Sheet. C) All the above. D) None of the above. Show Answer Correct Answer: B) Balance Sheet. 14. ''interest accrued on investment" is shown under the companies balance sheet under the main head A) Non current investment. B) Current assets. C) Other current assets. D) Other non-current assets. Show Answer Correct Answer: B) Current assets. 15. Which of the following is not a right of a common stockholder? A) Right to share in the profits and losses of the corporation. B) Right to dividends each year. C) Right to a share in the company's assets at the time of liquidation. D) Right to vote. Show Answer Correct Answer: B) Right to dividends each year. 16. Interim dividend is dividend declared and paid in the middle of the financial year. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 17. Binny Co has annual sales of and a current ratio of 3.2:1. All of its sales are forcash and are priced at a mark-up on cost Of 50%. The average cash balance is $ 40, 000 andthe inventory holding period is 90 days.Assuming 360 days in a year, what is Binny CO's quick ratio (acid test ratio)? A) 0.64. B) 0.53. C) 0.80. D) 1.56. Show Answer Correct Answer: A) 0.64. 18. Securities Premium Reserve is shown on the liabilities side in the Balance sheet under the head A) Reserves and Surplus. B) Current Liabilities. C) Share Capital. D) None of these. Show Answer Correct Answer: A) Reserves and Surplus. 19. Share Forfeiture Account appears in a Company's Balance Sheet under the Sub-head ..... A) Share Capital. B) Reserve & Surplus. C) Contingent Liability. D) Commitments. Show Answer Correct Answer: A) Share Capital. 20. When completing your Comparative Income Statement, your Wages Expense in Year 1 is $ 55, 000 and in Year 2 it is $ 53, 000. What is the percentage increase or decrease from Year 1 to Year 2? A) Decrease of 3.64%. B) Increase of 3.64%. C) Increase of 3.77%. D) Increase of 10.03%. Show Answer Correct Answer: A) Decrease of 3.64%. 21. While preparing the Balance Sheet of a company, Underwriting Commission is shown under which head? A) Unamortised Expenditure. B) Current Assets. C) Non Current Assets. D) Current Liabilities. Show Answer Correct Answer: A) Unamortised Expenditure. 22. Avery, David, and Charlotte are discussing the purpose of a balance sheet. Can you help them understand what it is for? A) Tracking the daily expenses of a company. B) Providing a snapshot of a company's financial position at a specific point in time. C) Forecasting future financial performance of a company. D) Measuring the market value of a company's assets. Show Answer Correct Answer: B) Providing a snapshot of a company's financial position at a specific point in time. 23. How will the acid-test ratio be calculated? A) Current Assets:Current Liabilities. B) Assets:Liabilities. C) Current Assets-Inventory:Current Liabilities. D) Current Assets + Inventory:Current Liabilities. Show Answer Correct Answer: C) Current Assets-Inventory:Current Liabilities. 24. Analysis of the statement of financial position of Charon for the year ended 20X9 reveals the following relationships:Current ratio 2:1Sales:current assets-5:1Acid test ratio-1.5:1If the sales for the year were $ 30 million, what is the value of inventory that will appear in the statement of financial position? A) $ 1.5m. B) $ 10.5m. C) $ 3.0m. D) $ 4.5m. Show Answer Correct Answer: A) $ 1.5m. 25. Expense for salespersons to travel for selling goods A) Administrative cost. B) Finance cost. C) Cost of Goods sold. D) Distribution cost. Show Answer Correct Answer: D) Distribution cost. ← 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 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 10Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books