Financial Statements and Analysis Test

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Financial Statements and Analysis Test - 13

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Weekly Quiz Competition

Question 1
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How a Company’s balance sheet is different from the balance sheet of partnership firm?

A
In case of a company‘s Balance sheet previous year‘s figures are required to be given whereas it is not so in the case of a partnership firm’s balance sheet.

B
A company‘s Balance Sheet format is fixed under schedule III .Whereas, there is no standard form prescribed under the Indian partnership Act,1932 for a partnership Firm’s balance sheet.

C
For company‘s Balance Sheet and partnership balance sheet format is fixed under schedule III.

D
Not different

Solution

Partnership firm's balance sheet is a T format balance sheet where capital and liabilities are shown on left hand side and assets are shown on right hand side. There is no need of sub dividing assets and liabilities into sub heads. A Company's balance sheet has a vertical format under which assets,liabilities and capital has to be sub divided into sub headings like shareholders fund,non current assets,current assets,current liabilities etc.
Question 2
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Study of relationship between various items is known

A
Trend Analysis

B
Common Size statements

C
Comparative statements

D
Ratio Analysis

Solution

Study of relationship between various items is known as Ratio Analysis. It is represented by a percentage.
Question 3
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Which statement shows the sources related to the inflow and Outflow of cash

A
Fund Flow Statement

B
Cash Flow Statement

C
Trend Analysis

D
Ratio Analysis

Solution

A cash flow statement is concerned with the inflow and outflow of cash under operating activities,investing activities and financing activities as per AS-3.
Question 4
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Name the expenses which refer to the indirect expenses relating to the principal revenue generating activities of the enterprise:

A
Miscellaneous Expenses

B
Sales Expenses

C
Non-Operating Expenses

D
Non Operating Expenses

Solution

Non-operating expenses refer to the indirect expenses relating to the principal revenue generating activities of the enterprise.A non-operating expense is an expense incurred by a business that's unrelated to its core operations. The most common types of non-operating expenses relate to depreciation, amortization, interest charges or other costs of borrowing.
Question 5
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Following items are the example of operating expenses except

A
Cash discount allowed to customers

B
Selling and Distribution expenses

C
Loss on sale of fixed assets

D
Bad debts and Provision for doubtful debts

Solution

Loss on sale is a non operating expense Following are the examples of operating expenses: Selling and Distribution expense, Cash discount allowed to customers,Bad debts and Provision for doubtful debts
Question 6
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While obtaining Gross profit, we deduct _____ from net revenue from operations

A
Direct Expenses

B
Cost of goods sold

C
Closing Stock

D
Opening stock and purchases

Solution

Following formula is used to calculate the Gross Profit: Gross Profit = Net revenue from operations – Cost of goods sold
Question 7
1 / -0

Why government is interested in analysis financial statement

A
To know whether the business is able to pay debt

B
To know the liquidity of business

C
To know the earning capacity

D
To Compile National Income and taxes and policy making.

Solution

Government is interest in financial statement analysis to compile the national income,do tax research and to take decisions related to policies of economic interest..
Question 8
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Why would public be interested in analyzing financial statement?

A
to know information about the continuance of an enterprise

B
To know whether the business is able to pay debt

C
To know the liquidity of business

D
To know the earning capacity

Solution

Public have an interest in information about the continuance of an enterprise, especially when they have a long term involvement with, or are dependent on, the enterprise.
Question 9
1 / -0

An amount receivable for sale of goods or services rendered in the ordinary course of business is classified as

A
Trade Payables

B
Trade Receivable

C
Trade Purchase

D
Trade sales

Solution

When goods are sold on credit and an amount is receivable for such sale of goods or services rendered in the ordinary course of business is classified as Trade Receivable.It consist of debtors and bills receivable.
Question 10
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A liability is classified as current when it satisfies the following conditions except

A
It is expected to be settled in the company’s normal operating cycle

B
The company does not have an unconditional right to offer settlement of the liability for at least 12 months after the reporting date

C
It is due to be settled beyond 12 months

D
It is held for the purpose of being traded

Solution

When a liability is due to be settled within 12 months form the closing date of previous accounting period it is shown under the current liabilities.

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Re-Attempt Weekly Quiz Competition

Financial Statements and Analysis Test - 13

Result

Financial Statements and Analysis Test - 13

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SHARING IS CARING

Question 1

In case of a company‘s Balance sheet previous year‘s figures are required to be given whereas it is not so in the case of a partnership firm’s balance sheet.

A company‘s Balance Sheet format is fixed under schedule III .Whereas, there is no standard form prescribed under the Indian partnership Act,1932 for a partnership Firm’s balance sheet.

For company‘s Balance Sheet and partnership balance sheet format is fixed under schedule III.

Not different

Solution

Question 2

Trend Analysis

Common Size statements

Comparative statements

Ratio Analysis

Solution

Question 3

Fund Flow Statement

Cash Flow Statement

Trend Analysis

Ratio Analysis

Solution

Question 4

Miscellaneous Expenses

Sales Expenses

Non-Operating Expenses

Non Operating Expenses

Solution

Question 5

Cash discount allowed to customers

Selling and Distribution expenses

Loss on sale of fixed assets

Bad debts and Provision for doubtful debts

Solution

Question 6

Direct Expenses

Cost of goods sold

Closing Stock

Opening stock and purchases

Solution

Question 7

To know whether the business is able to pay debt

To know the liquidity of business

To know the earning capacity

To Compile National Income and taxes and policy making.

Solution

Question 8

to know information about the continuance of an enterprise

To know whether the business is able to pay debt

To know the liquidity of business

To know the earning capacity

Solution

Question 9

Trade Payables

Trade Receivable

Trade Purchase

Trade sales

Solution

Question 10

It is expected to be settled in the company’s normal operating cycle

The company does not have an unconditional right to offer settlement of the liability for at least 12 months after the reporting date

It is due to be settled beyond 12 months

It is held for the purpose of being traded

Solution

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