This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 8 Analysis Of Financial Statements – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 6 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A balance sheet includes A) Assets. B) Liabilities. C) Owner's equity. D) All of the above. Show Answer Correct Answer: D) All of the above. 2. Which of the following will not be treated as part of Current Assets in case of Working capital assessment? A) Stock in process. B) Advances to supplier of capital goods. C) Advances to supplier of Raw Material. D) Credit Balance in Cash Credit Account. Show Answer Correct Answer: B) Advances to supplier of capital goods. 3. The difference between what it costs to make and sell a product and what a customer pays for it. A) Bookeeper. B) Profit. C) Revenue. D) Expenses. Show Answer Correct Answer: B) Profit. 4. What is the difference between a classified and unclassified balance sheet? A) The font size used in the balance sheet. B) The language in which the balance sheet is written. C) The difference between a classified and unclassified balance sheet lies in the level of detail provided regarding the classification of assets, liabilities, and equity. D) The color scheme of the balance sheet. Show Answer Correct Answer: C) The difference between a classified and unclassified balance sheet lies in the level of detail provided regarding the classification of assets, liabilities, and equity. 5. Which of the following is NOT a problem from carrying a lot of inventory? A) Inventory needs to be stored, which can be expensive. B) Inventory can be come obsolete, resulting in loss of value. C) Inventory can be lost (also known as "shrinkage"). D) Inventory can increase sales opportunities. Show Answer Correct Answer: D) Inventory can increase sales opportunities. 6. Which of the following is true for every adjusting entry? A) They affect only income statement accounts. B) They affect balance sheet account and an income statement account. C) They affect only balance sheet accounts. D) They affect only accounts with normal debit balance. Show Answer Correct Answer: B) They affect balance sheet account and an income statement account. 7. What is the value of current ratio A) 73.12%. B) 68.51%. C) 76.59%. D) 75.41%. Show Answer Correct Answer: C) 76.59%. 8. How is the P/E ratio calculated? A) By dividing a stock's price by its earnings per share. B) By dividing a stock's price by its dividends per share. C) By dividing a stock's price by its projected future earnings per share. D) By dividing a stock's price by its growth potential per share. Show Answer Correct Answer: A) By dividing a stock's price by its earnings per share. 9. What are the main components of a balance sheet? A) Investments and returns. B) Cash inflow and outflow. C) Revenue and expenses. D) Assets and liabilities. Show Answer Correct Answer: D) Assets and liabilities. 10. "Revenue" is defined as: A) The amount of equity a company has on hand at the end of the year. B) The amount of money a company has after deducting expenses. C) The amount of money a company takes in over a set amount of time. D) The amount of profit shareholders get to keep. Show Answer Correct Answer: C) The amount of money a company takes in over a set amount of time. 11. Which of the following would appear on the report form of a Balance Sheet for a sole proprietorship? A) Sales Revenue. B) Cash from Financing Activities. C) Owner's Capital. D) Cost of Goods SoldTagsDOK Level 1:Recall. Show Answer Correct Answer: C) Owner's Capital. 12. ISA 330 The auditor's assessment of the risks of material misstatement at the assertion level includes an expectation that the controls are operating effectively.When the auditor fine the client's Internal Control is can be to rely on the operating effectiveness of controls in determining as below except? A) Timing. B) Nature. C) Cost. D) Extent Substantive Procedures. Show Answer Correct Answer: C) Cost. 13. Define the term 'financial statement analysis'. A) Financial analysis of non-profit organizations. B) Analyzing marketing strategies of a company. C) Reviewing employee performance reports. D) Financial statement analysis is the process of reviewing and evaluating a company's financial statements to make better economic decisions. Show Answer Correct Answer: D) Financial statement analysis is the process of reviewing and evaluating a company's financial statements to make better economic decisions. 14. Tests of controls are performed only on those controls that the auditor has determined are suitably designed A) To rely internal controls without extending substantive test. B) To prevent, or detect and correct, a material misstatement in an assertion. C) To obtain sufficient appropriate audit evidence. D) To respond assess risk. Show Answer Correct Answer: B) To prevent, or detect and correct, a material misstatement in an assertion. 15. Which financial statement would you analyze to assess a company's liquidity? A) Income Statement. B) Balance Sheet. C) Cash Flow Statement. D) Statement of Owner's EquityTagsDOK Level 1:Recall. Show Answer Correct Answer: B) Balance Sheet. 16. The first "calculation" in the Cost of Merchandise Sold section of the income statement is ..... A) Cost of Delivered Merchandise. B) Net Purchases. C) Cost of Merchandise Available. D) Cost of Merchandise Sold. Show Answer Correct Answer: A) Cost of Delivered Merchandise. 17. What does subtracting liabilities from assets determine? A) Net worth. B) Total revenue. C) Operational costs. D) Investment value. Show Answer Correct Answer: A) Net worth. 18. A Cash Flow Statement: A) Reports the profit a company makes in a fiscal year before interest and taxes are taken out. B) Reports the amount of credit lenders are willing to offer as loans in the short term 12 months or less. C) Reports where the cash coming in came from and where the money going out was spent during a specific period of time. D) All of the answers are correct. Show Answer Correct Answer: C) Reports where the cash coming in came from and where the money going out was spent during a specific period of time. 19. Discuss the importance of the statement of cash flows. A) The statement of cash flows is only relevant for tax purposes. B) Companies can operate successfully without preparing a statement of cash flows. C) The statement of cash flows is important for analyzing a company's financial health and liquidity. D) Analyzing the statement of cash flows is unnecessary for investors. Show Answer Correct Answer: C) The statement of cash flows is important for analyzing a company's financial health and liquidity. 20. How do financial statements help investors make decisions? A) Financial statements help investors make decisions by providing marketing insights. B) Financial statements help investors make decisions by analyzing customer satisfaction. C) Financial statements help investors make decisions by providing crucial insights into a company's financial performance and health. D) Financial statements help investors make decisions by predicting future stock prices. Show Answer Correct Answer: C) Financial statements help investors make decisions by providing crucial insights into a company's financial performance and health. 21. Which of the following is not a current liability? A) Accounts payable. B) Mortgage. C) Bank loan. D) Collected state sales taxes. Show Answer Correct Answer: D) Collected state sales taxes. 22. Balance Sheet of company is required to be prepared in the format given in: A) Schedule II Part II. B) Schedule III Part III. C) Schedule III Part I. D) Table A. Show Answer Correct Answer: C) Schedule III Part I. 23. Feature of financial analysis is to present the data contained in financial statements A) Easy form. B) Convenient and rational groups. C) Comparable form. D) All of the Above. Show Answer Correct Answer: D) All of the Above. 24. On balance sheet, accruals, notes payable, and account payable are listed under which category? A) Current Liabilities. B) Non Current Liabilities. C) Accumulated Liabilities. D) Accrued Liabilities. Show Answer Correct Answer: A) Current Liabilities. 25. When performing test counts, the auditor selects of items from management's count records to compare the physical inventory and select of items from the physical inventory to compare management's count records, consistent with the audit objective to ensure the completeness and the accuracy of those records. The appropriate audit technique for this procedure is: A) Tracing. B) Vouching. C) Confirmation. D) Verification. Show Answer Correct Answer: A) Tracing. ← 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 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