This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Accountancy Chapter 8 Analysis Of Financial Statements – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Accountancy Chapter 8 Analysis Of Financial Statements Quiz 8 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. These are used by investors, market analysts, and creditors to evaluate a company's financial health and earnings. A) Statement of Financial Position. B) Financial Statements. C) Balance Sheet. D) Cash flows. Show Answer Correct Answer: B) Financial Statements. 2. If a business had $ 50, 000 in revenue and $ 30, 000 in cost of goods sold, what would the gross profit be? A) $ 20, 000. B) $ 80, 000. C) $ 30, 000. D) $ 50, 000. Show Answer Correct Answer: A) $ 20, 000. 3. What does the balance sheet primarily show about a company? A) Yearly profit margins. B) Employee performance metrics. C) Financial status at a specific time. D) Future financial projections. Show Answer Correct Answer: C) Financial status at a specific time. 4. What does the debt-to-equity ratio measure in financial ratios analysis? A) The proportion of company assets financed by debts and equity. B) The proportion of company assets financed through equity. C) The proportion of company assets financed through debt. D) The proportion of company's debt to its equity.TagsDOK Level 2:Skill/Concept. Show Answer Correct Answer: D) The proportion of company's debt to its equity.TagsDOK Level 2:Skill/Concept. 5. "Prepaid Expenses" are: A) Expenses that are paid in advance of receiving the goods or services. B) Expenses you pay later in the year. C) Expenses paid by the prior owner of the company. D) Expenses the cost is pre-determined. Show Answer Correct Answer: A) Expenses that are paid in advance of receiving the goods or services. 6. Revenues minus expenses equals: A) Assets. B) Liabilities. C) Owner Equity. D) Net Income. Show Answer Correct Answer: D) Net Income. 7. Operating Expenses include: A) Rent on office space. B) Office Supplies. C) Salaries and Wages. D) All answers are correct. Show Answer Correct Answer: D) All answers are correct. 8. What is operating profits according to the income statement? A) $ 357.6M. B) $ 200.0M. C) $ 605.0M. D) $ 427.5M. Show Answer Correct Answer: A) $ 357.6M. 9. To measure value creation, we should look at ..... A) Net profit margin. B) Market-to-book ratio. C) Asset turnover ratio. D) Debt-to-equity ratio. Show Answer Correct Answer: B) Market-to-book ratio. 10. The total amount of money received from the sale of goods or services. A) Bookeeper. B) Profit. C) Revenue. D) Expenses. Show Answer Correct Answer: C) Revenue. 11. Surplus, i.e., Balance in Statement of profit and loss is shown as A) Share capital. B) Reserves and surplus. C) Other long-term liabilities. D) Current liabilities. Show Answer Correct Answer: B) Reserves and surplus. 12. If closing stock appears in Trial Balance then it will be appearing in ; A) Trading Account. B) Balance Sheet. C) Profit & Loss Account. D) Trading A/c & Balance Sheet. Show Answer Correct Answer: B) Balance Sheet. 13. Income Statements answer the simple question: A) Is the company making a profit?. B) Is the company competitive?. C) Is the company ready to go public?. D) None of the answers are correct. Show Answer Correct Answer: A) Is the company making a profit?. 14. ABC Ltd. reported Net Sales of Rs. 9, 00, 000 ; Rs. 9, 90, 000 ; Rs. 10, 80, 000 respectively in year 2013, 2014 and 2015 respectively. If 2013 is the base year, what is the trend percent for 2015? A) 120 %. B) 110 %. C) 90 %. D) 100 %. Show Answer Correct Answer: A) 120 %. 15. What shows the overall worth of a business? A) Its non-current assets. B) Its net assets. C) Its liabilities. D) None of the above. Show Answer Correct Answer: B) Its net assets. 16. Why is the income statement also known as the profit and loss statement? A) It shows profit or loss over time. B) It tracks asset depreciation. C) It details employee salaries. D) It lists shareholder equity. Show Answer Correct Answer: A) It shows profit or loss over time. 17. How does the balance sheet help investors? A) By detailing net worth at a specific time. B) By tracking cash inflows and outflows. C) By showing company profitability. D) By listing employee benefits. Show Answer Correct Answer: A) By detailing net worth at a specific time. 18. What are the three main components of a cash flow statement? A) Revenue activities, expense activities, capital activities. B) Operating activities, investing activities, financing activities. C) Income activities, expenditure activities, investment activities. D) Sales activities, purchase activities, debt activities. Show Answer Correct Answer: B) Operating activities, investing activities, financing activities. 19. Excess of debit in profit and loss account is called A) Net profit. B) Net loss. C) Gross profit. D) Gross loss. Show Answer Correct Answer: B) Net loss. 20. What is the formula to calculate Owner's Equity if the assets are $50, 000 and liabilities are $ A) Assets + Liabilities. B) Assets-Liabilities. C) Liabilities-Assets. D) (Assets + Liabilities) / 2TagsDOK Level 2:Skill/Concept. Show Answer Correct Answer: B) Assets-Liabilities. 21. Why is it important for investors to analyze a company's financial ratios before making investment decisions? A) To assess the financial health, performance, and potential risks of the company. B) To find out the company's favorite food. C) To see if the CEO is left-handed. D) To determine the company's favorite color. Show Answer Correct Answer: A) To assess the financial health, performance, and potential risks of the company. 22. Calculate the current ratio if the current assets are $20, 000 and current liabilities are $ A) 0.5. B) 2.0. C) 1.5. D) 10.0TagsDOK Level 2:Skill/Concept. Show Answer Correct Answer: B) 2.0. 23. Entrepreneurs should prepare income statements A) Daily. B) Monthly. C) Quarterly. D) Yearly. Show Answer Correct Answer: B) Monthly. 24. For a utility, the ratio that is basically an operating asset turnover ratio is A) Operating revenue to operating property. B) Percent earned on operating property. C) Operating ratio. D) Funded debt to operating property. E) Return on assets. Show Answer Correct Answer: A) Operating revenue to operating property. 25. What is the valuie of operating profit margin? A) 58.16%. B) 54.59%. C) 45.23%. D) 61.27%. Show Answer Correct Answer: B) 54.59%. ← 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 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