This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 8 Analysis Of Financial Statements – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 12 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If manager is entitled to a 55 commission before deducting his commission, he will receive the commission of Rs ..... on a Rs.8, 400 profit A) 400. B) 420. C) 442. D) 440. Show Answer Correct Answer: B) 420. 2. SNAP, Inc. has a PE of 50 and a stock price of $ 35 while TRIP, Inc. has a PE of 15 and a stock price of $ 35. Based on PE only, which company might be considered "undervalued" . A) SNAP, Inc. B) TRIP, Inc. C) All the above. D) None of the above. Show Answer Correct Answer: B) TRIP, Inc. 3. Prepaid expenses if given in trial balance is shown in A) Trading account as deduction from respective expenses. B) Profit and loss account as deduction from respective expenses. C) Balance sheet. D) None of the above. Show Answer Correct Answer: C) Balance sheet. 4. What must be taken away from sales revenue to show the gross profit of a business? A) Expenses. B) Expenses and cost of sales. C) Cost of sales. D) None of the above. Show Answer Correct Answer: C) Cost of sales. 5. When making business investment decision you should: A) Look at the Income statement to see if you are making a profit. B) Consult all financial statements including ratio analysis and benchmarks within the industry. C) Have a tarot reading. D) Check your bank account to see how much money you have. Show Answer Correct Answer: B) Consult all financial statements including ratio analysis and benchmarks within the industry. 6. How is the net income calculated on an income statement? A) Total Revenues + Total Expenses = Net Income. B) Total Revenues x Total Expenses = Net Income. C) Total Revenues / Total Expenses = Net Income. D) Total Revenues-Total Expenses = Net Income. Show Answer Correct Answer: D) Total Revenues-Total Expenses = Net Income. 7. Accrued income is: A) A Liability. B) Revenue. C) An Asset. D) An Expense. Show Answer Correct Answer: C) An Asset. 8. Expenses prepaid is an example of Current Assets A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 9. What is the purpose of a statement of changes in equity? A) To determine the company's market share. B) To calculate the company's revenue. C) To analyze the company's expenses. D) To summarize the changes in a company's equity over a specific period. Show Answer Correct Answer: D) To summarize the changes in a company's equity over a specific period. 10. Sales of PQR Ltd. are Rs. 30, 00, 000 ; COGS is Rs. 18, 00, 000 ; Gross Profit percentage as per Common Size analysis is A) 100%. B) 60%. C) 40%. D) None of the above. Show Answer Correct Answer: C) 40%. 11. Who is a person or organization that has an interest in a business and uses its financial information? A) Underwriter. B) Bookkeeper. C) Share capital. D) Stakeholder. Show Answer Correct Answer: D) Stakeholder. 12. "Accounts Receivable" is the money: A) Deducted from net income. B) Owed before taxes. C) Owed by you the company. D) Owed to you but not yet received. Show Answer Correct Answer: D) Owed to you but not yet received. 13. A cost of goods sold section is included in a A) Merchandising business income statement. B) Service business income statement. C) Cash flow statement. D) Balance sheet. Show Answer Correct Answer: A) Merchandising business income statement. 14. Adjustment given are recorded once in trading or profit and loss account and again in balance sheet. It is so because of A) Matching principle. B) Dual aspect principle. C) Accrual concept. D) Materiality concept. Show Answer Correct Answer: B) Dual aspect principle. 15. A "snapshot" of an organization's financial position at a given time. 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: A) Statement of Financial Position. 16. Explain the significance of a high inventory turnover ratio for a company. A) It means the company is struggling to sell its inventory. B) It has no significance for the company's performance. C) It indicates that the company is not able to manage its inventory efficiently. D) It indicates that the company is efficiently managing its inventory by quickly selling and replacing its stock. Show Answer Correct Answer: D) It indicates that the company is efficiently managing its inventory by quickly selling and replacing its stock. 17. A company has total assets of Rs.100 lacs and a Net worth of Rs.20.00 lacs. can you guess the leverage ratio i.e. TOL/ATNW of the company? A) 4. B) 5. C) 6. D) 2.25. Show Answer Correct Answer: A) 4. 18. Contingent liability is shown as ..... A) A foot note in Balance sheet. B) A term liability in the Balance Sheet. C) A current liability in the Balance Sheet. D) In profit & Loss Account. Show Answer Correct Answer: A) A foot note in Balance sheet. 19. True or FalseAssets in a balance sheet can be:Plant and Equipment, Motor Vehicles, Buildings and Land A) False. B) True. C) All the above. D) None of the above. Show Answer Correct Answer: B) True. 20. Debts that are earlier written off if recovered are transferred to credit side of A) Debtors. B) Trading account. C) Profit and loss account. D) Provision for doubtful account. Show Answer Correct Answer: C) Profit and loss account. 21. Total current assets of yer 2013 are Rs. 30, 000 and year 2014 are Rs. 36, 000 ; It indicates A) Decrease of 20 %. B) Increase of 20 %. C) Increase of 120 %. D) Decrease of 120 %. Show Answer Correct Answer: B) Increase of 20 %. 22. Which analysis compares financial information side-by-side over different periods? A) Vertical analysis. B) Scenario analysis. C) Break-even analysis. D) Horizontal analysis. Show Answer Correct Answer: D) Horizontal analysis. 23. Revenue from operation is not taken as100 in preparing common-size statement of profit and loss. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 24. Goods destroyed by fire costing rupees 50000 and insurance Company admitted 60% leave the adjustment will be entered in A) Trading account. B) Profit and loss account. C) Balance sheet. D) Trading account profit and loss account and balance sheet. Show Answer Correct Answer: D) Trading account profit and loss account and balance sheet. 25. BIGnsmall, Inc. had an EPS of $ 6.66. This means A) The company has earnings expectations of $ 6.66 based on the future forecast. B) The company made $ 6.66 in revenue per share (before expenses). C) The company made $ 6.66 in profit per share (after expenses). D) The company paid $ 6.66 in dividends to shareholders. Show Answer Correct Answer: C) The company made $ 6.66 in profit per share (after expenses). ← 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 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books