This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 8 Analysis Of Financial Statements – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 2 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Comparative Statement shows ..... A) One year's performance. B) Comparative Performance. C) Financial Performance. D) Profitability Performance. Show Answer Correct Answer: B) Comparative Performance. 2. The amount of money a firm spent to buy or produce the products it sold during the period to which the income statement applies. 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: D) Cost of Goods Sold. 3. Which group most directly relies on statements to monitor, control, and plan resource use? A) Advertising vendors. B) Tax attorneys. C) Competitors. D) Stakeholders. Show Answer Correct Answer: D) Stakeholders. 4. Which term describes a written summary of changes from business transactions during an accounting cycle? A) Vertical analysis. B) Financial statement. C) Income statement. D) Organizational performance. Show Answer Correct Answer: B) Financial statement. 5. Which of the following actions is LEAST LIKELY to increase ROIC? A) Increase sales price per item. B) Increase variety in product portfolio. C) Reduce net operating working capital. D) Reduce unnecessary long-term assets. Show Answer Correct Answer: B) Increase variety in product portfolio. 6. For most companies, the common ordering of profit margins is: A) Gross profit margin > EBIT margin > Net profit margin. B) Net profit margin > EBIT margin > Gross profit margin. C) EBIT margin > Net profit margin > Gross profit margin. D) EBIT margin > Gross profit margin > Net profit margin. Show Answer Correct Answer: A) Gross profit margin > EBIT margin > Net profit margin. 7. What does beta measure in the stock market? A) The volatility of a stock. B) The price of a stock. C) The dividend yield of a stock. D) The market capitalization of a stock. Show Answer Correct Answer: A) The volatility of a stock. 8. Do you agree with this statement:An income statement is a financial statement that summarises a business's income and expenses during a given period of time. An income statement is also sometimes referred to as a profit and loss (P&L) statement. A) Yes. B) No. C) All the above. D) None of the above. Show Answer Correct Answer: A) Yes. 9. Penalty for late payment is an operating expense A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: B) FALSE. 10. What is more important and broader? Financial Statement Analysis or Financial Information Analysis A) Financial Statement Analysis. B) Financial Information Analysis. C) All the above. D) None of the above. Show Answer Correct Answer: B) Financial Information Analysis. 11. A rising operating ratio year over year most likely suggests what? A) Debt costs declining rapidly. B) Profits per dollar increasing. C) Sales growing faster than assets. D) Expenses consuming more of sales. Show Answer Correct Answer: D) Expenses consuming more of sales. 12. What are the types of Analysis? A) Internal Analysis. B) External Analysis. C) Both the Above. D) None of the above. Show Answer Correct Answer: C) Both the Above. 13. What is the primary purpose of an Income Statement in a sole proprietorship? A) To show the assets and liabilities at a specific point in time. B) To display the revenues and expenses over a specific period, showing net income or loss. C) To track the cash inflows and outflows during the financial year. D) To list the owner's personal expenses and investments.TagsDOK Level 1:Recall. Show Answer Correct Answer: B) To display the revenues and expenses over a specific period, showing net income or loss. 14. Horizontal analysis is also termed as dynamic analysis. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 15. If a person fails to pay his debt, such amount is considered as- A) Bad debts. B) Bad debts recovered. C) Provision for Bad debt. D) None of these. Show Answer Correct Answer: A) Bad debts. 16. If the insurance premium paid Rs. 1, 000 and prepaid insurance Rs. 300. The amount of insurance premium shown in profit and loss account will be A) Rs. 1, 300. B) Rs. 1, 000. C) Rs. 300. D) Rs. 700. Show Answer Correct Answer: D) Rs. 700. 17. Depreciation is: A) The cost of an asset when sold. B) The loss of value of an asset over time. C) None of the answers are correct. D) The cost of an asset when purchased. Show Answer Correct Answer: B) The loss of value of an asset over time. 18. The value of the stockholders' claims to the assets of a corporation is known as A) Stockholder's equity. B) Stakeholder's equity. C) Retained earnings. D) Liabilities. Show Answer Correct Answer: A) Stockholder's equity. 19. "Cost of Goods Sold (COGS)" is defined as: A) The total expenses a company incurs in a period of time. B) The operational costs of all departments in a company. C) All of the answers are correct. D) The total cost to a business to manufacture and sell a specific product or service. Show Answer Correct Answer: D) The total cost to a business to manufacture and sell a specific product or service. 20. Adjusting Entries? A) Assign revenue to the period in which they are earned. B) Help to properly measure the period's Net Profit / Loss. C) Bring asset and liability account to correct balances. D) All of besides statements are true regarding Adjusting Entries. Show Answer Correct Answer: D) All of besides statements are true regarding Adjusting Entries. 21. What does a high debt-to-equity ratio indicate about a company's financial health? A) Stability. B) Efficiency. C) Financial risk. D) Profitability. Show Answer Correct Answer: C) Financial risk. 22. Goods taken by proprietor for personal use are deducted from ..... , ..... In the balance sheet A) Purchases. B) Capital. C) Stock. D) None of the above. Show Answer Correct Answer: B) Capital. 23. Which activity in a cash flow statement includes sources of cash from investors and banks? A) Cash flow from operating activities. B) Cash flow from investing activities. C) Cash flow from financing activities. D) All of the above. Show Answer Correct Answer: C) Cash flow from financing activities. 24. % Increase/ Decrease is method of preparation of ..... A) Balance Sheet. B) Income Statement. C) Comparative Statement. D) Common-size Statement. Show Answer Correct Answer: C) Comparative Statement. 25. The financial statement that reports income/loss along with expenses. A) Balance sheet. B) Income statement. C) Owner's equity statement. D) Work sheet. Show Answer Correct Answer: B) Income statement. ← PreviousNext →Related QuizzesClass 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 1Class 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 10Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books