Financial Statements of a Company Test 10

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Financial Statements of a Company Test 10

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Weekly Quiz Competition

Question 1
1 / -0

The valuing of assets at _________ principle for balance sheet is followed while preparing financial statements.

A
Cost less depreciation

B
Cost plus depreciation

C
Depreciation minus accumulated depreciation

D
Accumulated depreciation plus depreciation

Solution

Asset valuation is the process of assessing the value of a company, real property or any other item of worth, in particular assets that produce cash flows. While preparing financial statement The fixed asset is depreciated until the book value equals scrap value. Book value at the end of year becomes book value of next year.
Question 2
1 / -0

Which of the following statements are true?
a. Financial statements are only interim report.
b. Financial statements are also known as annual records.
c. Financial statements are historic.

A
Both (a) and (b)

B
Both (a) and (c)

C
Both (b) and (c)

D
A, B, C

Solution

Financial statement of companies are summarized financial reports which provide the operating results and financial positions of the companies. Financial statements are based on historical data e.g. ratio analysis. Financial statements are also known as annual records because they are prepared on annual basis.
Question 3
1 / -0

The ____________ statement is also taken as an integral component of the financial statements of a company.

A
Fund flow

B
Cash flow

C
Comaprative

D
Common size

Solution

Cash flow statement refers to the analysis of actual movement of cash into and out of an organisation. The flow of cash into the business is called as cash inflow or positive cash flow and the flow of cash out of the firm is called as cash outflow or negative cash flow. This statement is also an integral component of financial statement.
Question 4
1 / -0

If a company uses a predetermined rate for absorbing factory overhead, the volume variance is the _______________________.

A
Underapplied or overapplied variable cost element of factory overhead.

B
Underapplied or overapplied fixed cost element of factory overhead.

C
Difference in budgeted costs and actual costs of fixed factory overhead items.

D
Difference in budgeted costs and actual costs of variable factory overhead items.

Solution

The fixed overhead volume variance is the difference between the amount of fixed overhead actually applied to produced goods based on production volume and the amount that was budgeted to be applied on produced goods.
Question 5
1 / -0

The dividend declared by Neetu limited is Rs.$$2$$ per share of face value of Rs.$$10$$ and the average market value is Rs.$$25$$. The yield is ______________.

A
$$5\%$$

B
$$8\%$$

C
$$10\%$$

D
$$12.5\%$$
Question 6
1 / -0

Which of the following is true?

A
Depreciation is a use of funds.

B
Increase in a Non-current liability is a source.

C
Decrease in an asset, other than cash is a use.

D
Increase in bills payable is a use.

E
Increase in equity is a use.

Solution

Depreciation is the decrease in the value of assets and the method used to reallocate, or "write down" the cost of a tangible asset (such as equipment) over its useful life span.

A non-cash item refers to an expense listed on an income statement, such as depreciation,that does not involve a cash payment.
Hence, option C is correct.
Question 7
1 / -0

Which of the following statement is true?
A. Financial statement provide information about cash flow.
B. Financial statement provide information about the credit earning capacity of the business.

A
Only A

B
Only B

C
Both A and B

D
None of the above

Solution

The primary objective of financial statement is to assist the users in their decision making. Financial statement provide information useful to investors and creditors for predicting, comparing and evaluating, potential cash flows in term of amount, timing and related uncertainties.
Question 8
1 / -0

The _______ objective of financial statements is to assist the users in their decision-making.

A
Primary

B
Secondary

C
Treasury

D
None of the above

Solution

Financial statements provide information about the results of the business concern during a specified period of time in terms of assets and liabilities, which provide the basis for taking decisions. Thus the primary objective of financial statements is to assist the users in their decision-making.
Question 9
1 / -0

The depreciation is provided taking into consideration the useful ______ life of fixed assets.

A
Annual

B
Accounting

C
Economic

D
Current

Solution

Under more than one circumstances, facts and figures presented through financial statements based on personal judgments. The depreciation is provided taking into consideration the useful economic life of fixed assets. Provisions for doubtful debts are made on estimates and personal judgments.
Question 10
1 / -0

Financial statement are prepared to provide adequate, _______ and periodical information about economic resources and obligations of a business firm.

A
Reliable

B
Non material

C
Material

D
Non-reliable

Solution

Financial statements are the basic source of information to the shareholders and other external parties for understanding the profitability and financial position of any concern. One of the objective of financial statement is providing information about economic resources and obligation of a business. They provide adequate, reliable and periodic information about economic resources and obligations of a business firm to investors and other external parties who have limited authority, or ability to obtain information.

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Re-Attempt Weekly Quiz Competition

Financial Statements of a Company Test 10

Result

Financial Statements of a Company Test 10

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Rank

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SHARING IS CARING

Question 1

Cost less depreciation

Cost plus depreciation

Depreciation minus accumulated depreciation

Accumulated depreciation plus depreciation

Solution

Question 2

Both (a) and (b)

Both (a) and (c)

Both (b) and (c)

A, B, C

Solution

Question 3

Fund flow

Cash flow

Comaprative

Common size

Solution

Question 4

Underapplied or overapplied variable cost element of factory overhead.

Underapplied or overapplied fixed cost element of factory overhead.

Difference in budgeted costs and actual costs of fixed factory overhead items.

Difference in budgeted costs and actual costs of variable factory overhead items.

Solution

Question 5

$$5\%$$

$$8\%$$

$$10\%$$

$$12.5\%$$

Question 6

Depreciation is a use of funds.

Increase in a Non-current liability is a source.

Decrease in an asset, other than cash is a use.

Increase in bills payable is a use.

Increase in equity is a use.

Solution

Question 7

Only A

Only B

Both A and B

None of the above

Solution

Question 8

Primary

Secondary

Treasury

None of the above

Solution

Question 9

Annual

Accounting

Economic

Current

Solution

Question 10

Reliable

Non material

Material

Non-reliable

Solution

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