Financial Statements and Analysis Test

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Financial Statements and Analysis Test - 1

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Weekly Quiz Competition

Question 1
1 / -0

Who is interested in the analysis of financial statement?

A
Government

B
Creditors

C
Investors

D
All of these

Solution

Following parties are interested in the Financial statement analysis:

Creditors(to know if they will get their payment)

Government( to levy taxes)

Investors(to know how return on their investment)
Question 2
1 / -0

Analysis of Financial statements suffers from the limitation of window dressing which means….

A
show items at incorrect value to portray better profitability

B
may overvalue closing stock to show higher profits

C
hide some vital information

D
All of these
Question 3
1 / -0

Rent received, Profit on sale of fixed assets, Compensation for acquisition of land are example of

A
Non-operating expenses

B
Non-operating Incomes

C
operating Incomes

D
operating expenses

Solution

Rent received, Profit on sale of fixed assets, Compensation for acquisition of land are example of Non-operating incomes.Non-operating income is the portion of an organization's income that is derived from activities not related to its core operations.
Question 4
1 / -0

Following Items that can be shown as contingent Liabilities in a company‘s Balance sheet except

A
Claims against the Company not acknowledged as debts.

B
Arrears of Dividend on Cumulative preference shares

C
Advance to Subsidiaries

D
Uncalled Liability on partly paid shares.

Solution

Following Items that can be shown as contingent Liabilities in a company‘s Balance sheet except Advance to Subsidiaries.

1)Claims against the Company not acknowledged as debts

2)Uncalled Liability on partly paid shares.

3)Arrears of Dividend on Cumulative preference shares

Contingent liabilities are those which may or may not arise as they are dependenT on happening in future.
Question 5
1 / -0

Which Indian Companies Act is in force these days?

A
Companies Act 2013

B
Indian Companies Act 2014

C
Indian Companies Act 1956

D
Indian Companies Act 2015

Solution

Companies Act 2013 is in force these days. Earlier Companies Act 1956 was in force.
Question 6
1 / -0

Following are the limitations of financial analysis except

A
To make comparative study within the firm and with other firms

B
Don't reflect changes in price level.

C
Single years' Analysis of financial statement have limited use.

D
Affected by the personal ability and bias of the Analyst

Solution

Following are the limitations of financial statement analysis:

•Don't reflect changes in price level.

•Affected by the personal ability and bias of the Analyst

•Single years' Analysis of financial statement have limited use.
Question 7
1 / -0

The point where total of sales is exactly equal to the total of cost.

A
Zero Point

B
Profit Point

C
Break-even Point

D
Loss Point

Solution

Break-even point is a point where total of sales is exactly equal to the total of cost to the total of cost of sales.
Question 8
1 / -0

Name the items under Shareholder’s Fund is comprised of company’s balance sheet.

A
Share Capital

B
Reserves and Surplus

C
Money received against share warrant

D
All of these

Solution

Shareholders fund is divided into the following parts:

Share Capital

Reserves and Surplus

Money received against share warrant
Question 9
1 / -0

Prepaid expenses are shown under____________

A
Cash Equivalents

B
Inventories

C
Other current assets

D
None of these

Solution

Prepaid expenses are those expenses which paid in advance by the firm. These expenses are shown under other current assets.
Question 10
1 / -0

The Real object of Analysis of Financial Statement is …………

A
To assess the total liabilities of the firm

B
To know about historical cost concept

C
To assess the total expenses of the firm

D
To measure the financial strength of the business

Solution

The main objective of analysis of financial statement is to measure the financial strength and performance of the firm.

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Re-Attempt Weekly Quiz Competition

Financial Statements and Analysis Test - 1

Result

Financial Statements and Analysis Test - 1

Score

-

Rank

-

SHARING IS CARING

Question 1

Government

Creditors

Investors

All of these

Solution

Question 2

show items at incorrect value to portray better profitability

may overvalue closing stock to show higher profits

hide some vital information

All of these

Question 3

Non-operating expenses

Non-operating Incomes

operating Incomes

operating expenses

Solution

Question 4

Claims against the Company not acknowledged as debts.

Arrears of Dividend on Cumulative preference shares

Advance to Subsidiaries

Uncalled Liability on partly paid shares.

Solution

Question 5

Companies Act 2013

Indian Companies Act 2014

Indian Companies Act 1956

Indian Companies Act 2015

Solution

Question 6

To make comparative study within the firm and with other firms

Don't reflect changes in price level.

Single years' Analysis of financial statement have limited use.

Affected by the personal ability and bias of the Analyst

Solution

Question 7

Zero Point

Profit Point

Break-even Point

Loss Point

Solution

Question 8

Share Capital

Reserves and Surplus

Money received against share warrant

All of these

Solution

Question 9

Cash Equivalents

Inventories

Other current assets

None of these

Solution

Question 10

To assess the total liabilities of the firm

To know about historical cost concept

To assess the total expenses of the firm

To measure the financial strength of the business

Solution

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