Analysis of Financial Statements MCQs

[set-2]

Chapter: Financial Statement of Corporate Organisations

26. Which from the following is NOT an example of intangible assets?

A. trademarks
B. patents
C. buildings
D. technical expertise
Answer: C

o m
27. The following are the examples of financial assets except?
A. stocks
. c
B. bank loan
te
C. bond a
D. raw material
q M
Answer: D
c
M
28. Business finance refers to ...... and ........ employed in a business.
A. money
B. credit
C. both a & b
D. none of the above
Answer: C

29. Business finances is concerned with _________ funds and _______ funds from
different sources.
A. estimation of funds
B. raising of funds
C. short term finance
D. both a & b
Answer: D

30. Which of the following is not a function of finance manager?

 A. mobilization of funds
B. deployment of funds
C. control over use of funds
D. manipulate share price of the company
Answer: D

31. Which is the following main decision taken by the financial manager in a
company?
A. income decision
B. financing decision
C. appraisal decision
D. budget decision
Answer: B

32. Finance Function comprises

A. safe custody of funds only
B. expenditure of funds only
C. procurement of finance only
D. procurement & effective use of funds
Answer: D

33. The finance manager is accountable for.

A. earning capital assets of the company
B. effective management of a fund
C. arrangement of financial resources
D. proper utilization of funds
Answer: C

34. The focal point of financial management in a firm is:

A. the number and types of products or services provided by the firm.
B. the minimization of the amount of taxes paid by the firm.
C. the creation of value for shareholders.
D. the dollars profits earned by the firm.
Answer: C

Chapter: Introduction to Analysis and Interpretation of Financial Statements

35. The term financial statement refers to…

Download more sets at McqMate.com

 A. income statement
B. cash flow and fund flow
C. balance sheet
D. all
Answer: D

36. Which of the following is the main objective of a financial statement?

A. to know the solvency
B. to know the debt capacity
C. to know the earning capacity
D. all
Answer: D

37. In financial statements, the fixed assets are shown at …

A. market price
B. cost price
C. replacement price
D. none
Answer: A

38. What is followed while preparing the financial statements?

A. accounting conventions
B. accounting principles
C. accounting concepts
D. all
Answer: D

39. In financial statement the stock is valued at cost or market price whichever is
less on the basis of…
A. accounting concepts
B. accounting conventions
C. accounting principles
D. none
Answer: B

40. The balance sheet shows …

A. the source of working capital

Download more sets at McqMate.com

 B. the change in working capital
C. both
D. none
Answer: D

41. The analysis and interpretations of the financial statement will reveal …
A. the financial position
B. the profitability
C. none
D. both
Answer: D

42. The process of explaining the meaning, significance and relationship between
two financial factors is called …
A. summarization
B. analysis
C. interpretation
D. none
Answer: C

43. The process of comparing various financial factors of a company over a period
of time is known as …
A. inter?firm comparison
B. ratio analysis
C. intra?firm comparison
D. inter?industry comparison
Answer: C

44. Which of the following is technique of financial statement analysis?

A. common?size statement
B. comparative statement
C. trend analysis
D. all
Answer: D

45. ________is a simply the amount of cash coming in to a business.

A. cash flow

Download more sets at McqMate.com

 B. inflow
C. both a and b
D. none of the above.
Answer: A

46. If value of opening inventories increases, what happens to the value of gross
profit?
A. decreases
B. increases
C. stays the same
D. gets closer to net profit
Answer: A

47. Incorrect cash flow planning can lead to ________

A. solvency
B. insolvency
C. bankruptcy
D. failure
Answer: C

48. Analysis of any financial Statement comprises

A. balance sheet
B. p&l account
C. trading account
D. all of the above
Answer: D

49. Which of the following are techniques, tools or methods of analysis and
interpretation of financial statements?
A. ratio analysis
B. average analysis
C. trend analysis
D. all of the above
Answer: D

50. Interpretation of accounts is the

A. art and science of translating the figures
B. to know financial strengths and weaknesses of a business

Download more sets at McqMate.com

 C. to know the causes for the prevailing performance of business
D. all of the above
Answer: D

Download more sets at McqMate.com