This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 7 Financial Statements Of Companies – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 7 Financial Statements Of Companies Quiz 6 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. All Revenues A) Income Statement. B) Balance Sheet. C) All the above. D) None of the above. Show Answer Correct Answer: A) Income Statement. 2. The working capital of a business is the difference between: A) Total assets and total liabilities. B) Total quick assets and total current liabilities. C) Total current assets and total current liabilities. D) None of the above. Show Answer Correct Answer: C) Total current assets and total current liabilities. 3. Which of the the following won't help you to identify the return of shareholders in a company. A) EPS. B) DPS. C) NAV. D) ROL. Show Answer Correct Answer: D) ROL. 4. The accounting principle meaning that when in doubt, the accountant should choose the method that will be least likely to overstate assets and revenue is called A) The matching principle. B) Materiality. C) Prudence. D) The monetary unit assumption. Show Answer Correct Answer: C) Prudence. 5. The Income Statement has the following sections A) Assets. B) Expenses. C) Liabilities. D) Revenue. E) Equity. Show Answer Correct Answer: B) Expenses. 6. Stock at the beginning of the year A) Opening Inventory. B) Sales. C) Purchases. D) Drawings. Show Answer Correct Answer: A) Opening Inventory. 7. A decrease in the balance of Accounts Receivable. A) Operating. B) Investing. C) Financing. D) Supplemental. Show Answer Correct Answer: A) Operating. 8. What are liabilities? A) The money paid to employees. B) Costs of operating a business. C) The act of buy items. D) What a company owes. Show Answer Correct Answer: D) What a company owes. 9. What is the purpose of preparing the Statement of Financial Performance? A) Inform stakeholders the profitability of business. B) Inform stakeholders the income and expenses of business. C) Inform stakeholders the nature of business. D) Inform stakeholders the size of business. Show Answer Correct Answer: A) Inform stakeholders the profitability of business. 10. Identify the correct statement.Statement 1-Trade Receivables outstanding for a period exceeding six months from the date they are due for payment should be separately stated.Statement 2-Bank deposits with more than twelve months maturity is not required to be disclosed separately. A) Only 1 is correct. B) Only 2 is correct. C) Both 1 and 2 are correct. D) None of the above. Show Answer Correct Answer: A) Only 1 is correct. 11. Which of the following may NOT provide cash inflow to the company? A) Payment of liabilities. B) Collection from customers. C) Sale of company car. D) Payment by employee of his loan. Show Answer Correct Answer: A) Payment of liabilities. 12. The ..... is the positive difference between the selling price and the cost of goods sold. A) Net Profit. B) Gross Profit. C) Net Loss. D) Gross Loss. Show Answer Correct Answer: B) Gross Profit. 13. Office Equipment is classified as a(n) A) Current asset. B) Fixed asset. C) Current liability. D) Revenue. Show Answer Correct Answer: B) Fixed asset. 14. Pind co has a current ratio Of 1.5 and a quick ratio Of 0.9.If cash in the bank is used to pay some Of the payable, what will be the effect on thecurrent and quick ratios? A) Increase, Increase. B) Increase, Decrease. C) Decrease, Increase. D) Decrease, Decrease. Show Answer Correct Answer: B) Increase, Decrease. 15. Prepaid Expenses appear in a Company's Balance Sheet under the Sub-head ..... A) Other Current Assets. B) Short-term Loans & Advances. C) Intangible Assets. D) Other Non-Current Assets. Show Answer Correct Answer: A) Other Current Assets. 16. Decrease in revenue of a trading business A) Sales returns. B) Purchase returns. C) Bad debts. D) Drawings. Show Answer Correct Answer: A) Sales returns. 17. From the list below, which ratio calculates the solvency of a business? A) Total assets:Total liabilities. B) Current assets:Current liabilities. C) Long term debt:Total Liabilities. D) Total assets-inventory:Total Liabilities. Show Answer Correct Answer: A) Total assets:Total liabilities. 18. Henry, Olivia, and Abigail are playing a game of 'Financial Whiz Kids'. They are stuck on a question and need your help. Can you tell them what the formula for calculating total assets is? A) Total assets = Current liabilities + Non-current liabilities. B) Total assets = Current assets-Non-current assets. C) Total assets = Current assets * Non-current assets. D) Total assets = Current assets + Non-current assets. Show Answer Correct Answer: D) Total assets = Current assets + Non-current assets. 19. Calls in Advance appear in a company's Balance Sheet under ..... A) Share Capital. B) Current Liability. C) Long Term Borrowings. D) Reserve and Surplus. Show Answer Correct Answer: B) Current Liability. 20. Which of the following is not a part of the financial statement of a company? A) Profit and loss A/c. B) Balance sheet. C) Ledger account. D) Cash flow statement. Show Answer Correct Answer: C) Ledger account. 21. Income statements are also known as ..... A) Statement of financial Position. B) Profit and loss account. C) Journal. D) Double column Cash book. Show Answer Correct Answer: B) Profit and loss account. 22. What does the income statement show? A) The profitability of a business over a period of time. B) The cash inflows and outflows of a business. C) The assets, liabilities, and equity of a business. D) The marketing expenses of a business. Show Answer Correct Answer: A) The profitability of a business over a period of time. 23. What is the purpose of an Income Statement? A) To determine the number of employees in a company. B) To predict future stock prices. C) To calculate the cost of goods sold. D) To show a company's financial performance over a specific period. Show Answer Correct Answer: D) To show a company's financial performance over a specific period. 24. Zoe, Grace, and Kai are learning about finance. Can you help them identify the three main types of financial statements? A) Expense statement, liability statement, and investment statement. B) Income statement, balance sheet, and cash flow statement. C) Profit statement, equity statement, and revenue statement. D) Revenue statement, asset statement, and liability statement. Show Answer Correct Answer: B) Income statement, balance sheet, and cash flow statement. 25. Goods returned to suppliers that decrease Cost of goods sold A) Sales returns. B) Credit purchases. C) Purchase returns. D) None of the above. Show Answer Correct Answer: C) Purchase returns. ← 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 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