This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 8 Analysis Of Financial Statements – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 5 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Prepaid Insurance existing in the Trial Balance is shown in the Balance Sheet in the assets side because of A) Accrual Concept. B) Matching Principle. C) Materiality Principle. D) Cost Principle. Show Answer Correct Answer: A) Accrual Concept. 2. The current ratio helps us to determine whether:i) The business will be able to meet their long-term obligationsii) The business will be able to meet their short-term obligationsiii) The business is carrying too much inventoryiv) The business is not paying their long-term debtv) The business is not paying their short-term debtvi) The business is carrying too much cash A) Ii and iv. B) I, ii, iii, and vi. C) V. D) Ii, iii, v, and vi. Show Answer Correct Answer: D) Ii, iii, v, and vi. 3. ISA 520 The auditor may obtain the availability and reliability of information needed to apply substantive analytical procedures, and the results of any such analytical procedures performed by the entity.Who are preparing the availability and reliability of information needed to apply substantive analytical procedures? A) Management. B) The auditor. C) Related industry. D) Investor. Show Answer Correct Answer: A) Management. 4. An entrepreneur should prepare a cash flow statement A) Daily. B) Monthly. C) Quarterly. D) Yearly. Show Answer Correct Answer: B) Monthly. 5. Income received in advance is deducted from the income because of A) Revenue recognition concept. B) Accrual concept. C) Matching concept. D) Prudence concept. Show Answer Correct Answer: C) Matching concept. 6. What is the formula for calculating the current ratio? A) Current Ratio = Current Assets / Current Liabilities. B) Current Ratio = Net Income / Total Liabilities. C) Current Ratio = Fixed Assets / Current Liabilities. D) Current Ratio = Total Assets / Total Liabilities. Show Answer Correct Answer: A) Current Ratio = Current Assets / Current Liabilities. 7. Owner's Equity 10 lakh, Creditors 8 lakh, TL 12 lakh, Debtors 6 lakh, FA 4 lakh, Investment in Group Co. 7 lakh, stock 8 lakh, software 5 lakh. Please calculate ATNW? A) Rs. 24 Lakh. B) Rs. 3 Lakh. C) Rs. 10 Lakh. D) (Rs. 2 Lakh). Show Answer Correct Answer: D) (Rs. 2 Lakh). 8. Which type of accounting provides information to external parties? A) Financial accounting. B) Managerial accounting. C) Tax accounting. D) Both financial and managerial accounting. Show Answer Correct Answer: A) Financial accounting. 9. To obtain appropriate audit evidence consists the reliable evidence information such as confirmations must be controlled by: A) A client employee to maintain for accounts bank reconciliation. B) A financial statement auditor. C) A third party feedback. D) A client's sales department. Show Answer Correct Answer: B) A financial statement auditor. 10. Studying a company's financial statements and using comparisons and ratios is called ..... measures. A) Creative. B) Quantitative. C) Qualitative. D) Technical. Show Answer Correct Answer: B) Quantitative. 11. Financing Activities show how a company raises and repays capital through: A) All answers are correct. B) Reducing or increasing the workforce to match business cycles. C) Buying and selling long term fixed assets. D) Debt and equity financing. Show Answer Correct Answer: D) Debt and equity financing. 12. Which of the following items would not appear on an income statement? A) Rent Expense. B) Trade Payable. C) Sales Revenue. D) Cost of Goods Sold. Show Answer Correct Answer: B) Trade Payable. 13. Which step comes first when preparing an income statement for a service business? A) Write the heading. B) Calculate net income. C) Record expenses. D) Record revenue. Show Answer Correct Answer: A) Write the heading. 14. Which of these would be considered to be a current asset by a business? A) Business premises. B) Money owed by debtors. C) Delivery vans. D) None of the above. Show Answer Correct Answer: B) Money owed by debtors. 15. Calculate gross profit if rate of gross profit is 25% on sales and cost of goods sold are 180000 A) 60000. B) 36000. C) 45000. D) 30000. Show Answer Correct Answer: A) 60000. 16. What is the value of net profit margin? A) 28.35%. B) 34.57%. C) 25.41%. D) 33.06%. Show Answer Correct Answer: D) 33.06%. 17. The costs incurred in the day-to-day operations of an organization. A) Bookeeper. B) Profit. C) Revenue. D) Expenses. Show Answer Correct Answer: D) Expenses. 18. "Gross Profit Margin" calculates: A) The PERCENTAGE of profit a company makes on its goods and services. B) The DOLLARS a company makes before paying commissions. C) The DOLLARS a company makes after expenses. D) All of the answers are correct. Show Answer Correct Answer: A) The PERCENTAGE of profit a company makes on its goods and services. 19. What is the role of auditors in verifying financial statements? A) Auditors verify the accuracy and reliability of financial statements, ensuring compliance with accounting standards and regulations. B) Auditors are responsible for setting financial goals for the company. C) Auditors create financial statements from scratch. D) Auditors primarily focus on marketing strategies. Show Answer Correct Answer: A) Auditors verify the accuracy and reliability of financial statements, ensuring compliance with accounting standards and regulations. 20. Closing stock is shown in Financial Statements at: A) Cost price. B) Reliasable Value. C) Cost price or Reliasable Value whichever is greater. D) Cost price or Reliasable Value whichever is less. Show Answer Correct Answer: D) Cost price or Reliasable Value whichever is less. 21. What can be inferred if there is a large discrepancy between profit and cash flow? A) The company is expanding rapidly. B) The company is investing in technology. C) There might be accounting issues. D) The company is reducing its debt. Show Answer Correct Answer: C) There might be accounting issues. 22. Which statement summarizes revenue and expenses for a specific accounting period? A) Income statement. B) Balance sheet. C) Trial balance. D) Cash budget. Show Answer Correct Answer: A) Income statement. 23. The source of information for preparing the income statement is the general ledger. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 24. In Trend Analysis earliest year is considered as ..... year. A) Current. B) Base. C) Last. D) First. Show Answer Correct Answer: B) Base. 25. What is the value of total assets A) $ 4.985.7M. B) $ 4, 284.6M. C) $ 4, 451.9M. D) $ 3, 951.2M. Show Answer Correct Answer: C) $ 4, 451.9M. ← 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 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