This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 8 Analysis Of Financial Statements – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 10 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Define the term 'retained earnings' in financial statements. A) Investments made by external stakeholders. B) Profits distributed as dividends to shareholders. C) Operating expenses incurred by the business. D) Accumulated profits not paid out as dividends but retained and reinvested in the business. Show Answer Correct Answer: D) Accumulated profits not paid out as dividends but retained and reinvested in the business. 2. An Income Statement is also knows as a: A) Revenue and Cost Statement. B) Profit and Expense Statement. C) Asset and Liability Statement. D) Profit and Loss Statement. Show Answer Correct Answer: D) Profit and Loss Statement. 3. A financial report that shows an organization's profitability over a period of time-month, quarter, or year. A) Statement of Financial Position. B) Statement of the Comprehensive Income. C) Statements of Cash Flow. D) Cost of Goods Sold. Show Answer Correct Answer: B) Statement of the Comprehensive Income. 4. Wages and salaries account is shown in A) Trading account. B) Profit and loss account. C) Balance sheet. D) Trading account and balance sheet. Show Answer Correct Answer: A) Trading account. 5. The ownership of a corporation is represented by shares of stock A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 6. Which of the following ratio is NOT part of the cash conversion cycle? A) Average days in inventory. B) Average collection period. C) Average payment period. D) Average payback period. Show Answer Correct Answer: D) Average payback period. 7. "NET INCOME also known as NET PROFIT" is: A) Profit before you pay taxes and interest. B) Profit before you deduct operating expenses. C) The money used to pay taxes and health benefits. D) Profit left over after all the expenses have been deducted from your total revenue. Show Answer Correct Answer: D) Profit left over after all the expenses have been deducted from your total revenue. 8. Securities Premium is clubbed under Fictitious Asset A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: B) FALSE. 9. What can justify a high P/E ratio? A) Limited growth potential. B) Low earnings per share. C) Expected increase in earnings and growth opportunities. D) Low stock price. Show Answer Correct Answer: C) Expected increase in earnings and growth opportunities. 10. What should raise an investor's skepticism when reviewing financial statements? A) High profits with low cash flow increase. B) Consistent cash flow. C) Increased asset value. D) Decreased liabilities. Show Answer Correct Answer: A) High profits with low cash flow increase. 11. The amount a company owes to suppliers for goods and services purchased with credit. A) Current Assets. B) Account Receivable. C) Current Liabilities. D) Account Payable. Show Answer Correct Answer: D) Account Payable. 12. Prepaid expenses are also called: A) Advance expenses. B) Deferred expenses. C) Unexpired expenses. D) All of these. Show Answer Correct Answer: D) All of these. 13. Income earned but not received is shown in: A) Liabilities. B) Foot notes. C) Assets. D) None of them. Show Answer Correct Answer: C) Assets. 14. In ..... income statement sales is considered equal to 100 A) Comparative. B) Income. C) Common Size. D) Balance Sheet. Show Answer Correct Answer: C) Common Size. 15. State whether each of the following is True or False:Statement of profit and loss account shows the operating performance of an enterprise for a period of time. A) False. B) True. C) All the above. D) None of the above. Show Answer Correct Answer: B) True. 16. If Sales for year 2015 are Rs. 50, 00, 000 ; COGS is Rs. 40, 00, 000 ; GOGS and Gross profit as per Common Size analysis is A) 100%, 80%. B) 80%, 100%. C) 20%, 80%. D) 80%, 20%. Show Answer Correct Answer: D) 80%, 20%. 17. A statement that includes a column showing the changes in percentages from the first period to the ending period is called a A) Balance sheet. B) Comparative balance sheet. C) Same-size balance sheet analysis. D) Competitive balance sheet. Show Answer Correct Answer: C) Same-size balance sheet analysis. 18. On the balance sheet ..... A) Assets = Liabilities + Equity. B) Assets + Liabilities = Equity. C) Assets-Liabilities = Equity. D) Assets = Liabilities-Equity. Show Answer Correct Answer: A) Assets = Liabilities + Equity. 19. ..... Analysis shows trend in performance. A) Vertical. B) Trend. C) Technical. D) Horizontal. Show Answer Correct Answer: B) Trend. 20. What does the P/E ratio compare? A) A stock's price to its company earnings. B) A stock's price to its dividends. C) A stock's price to its projected future earnings. D) A stock's price to its growth potential. Show Answer Correct Answer: A) A stock's price to its company earnings. 21. What does the return on assets (ROA) ratio measure? A) Market share of a company. B) Total revenue of a company. C) Number of employees in a company. D) Profitability of a company. Show Answer Correct Answer: D) Profitability of a company. 22. Where do you find the beginning balance for Retained Earnings? A) Worksheet. B) Income statement. C) Statement of retained earnings. D) Balance sheet. Show Answer Correct Answer: A) Worksheet. 23. Which analysis states a figure as a percentage of a base amount on the same statement? A) Common-size benchmarking. B) Trend indexing. C) Horizontal analysis. D) Vertical analysis. Show Answer Correct Answer: D) Vertical analysis. 24. What is total shareholders' equity according to the balance sheet? A) $ 2372.1M. B) $ 3, 274.0M. C) $ 13177.9M. D) $ 2, 851.9M. Show Answer Correct Answer: B) $ 3, 274.0M. 25. What is the purpose of a balance sheet in financial statements? A) To predict future financial performance. B) To provide a snapshot of a company's financial position at a specific point in time. C) To analyze market trends. D) To calculate employee salaries. Show Answer Correct Answer: B) To provide a snapshot of a company's financial position at a specific point in time. ← PreviousNext →Related QuizzesClass 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 1Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 2Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 3Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 4Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 5Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 6Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 7Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 8Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 9Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books