McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) .
Chapters
| 1. |
The term financial statement refers to… |
| A. | income statement |
| B. | cash flow and fund flow |
| C. | balance sheet |
| D. | all |
| Answer» D. all | |
| 2. |
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. all | |
| 3. |
In financial statements, the fixed assets are shown at … |
| A. | market price |
| B. | cost price |
| C. | replacement price |
| D. | none |
| Answer» A. market price | |
| 4. |
What is followed while preparing the financial statements? |
| A. | accounting conventions |
| B. | accounting principles |
| C. | accounting concepts |
| D. | all |
| Answer» D. all | |
| 5. |
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. accounting conventions | |
| 6. |
The balance sheet shows … |
| A. | the source of working capital |
| B. | the change in working capital |
| C. | both |
| D. | none |
| Answer» D. none | |
| 7. |
The analysis and interpretations of the financial statement will reveal … |
| A. | the financial position |
| B. | the profitability |
| C. | none |
| D. | both |
| Answer» D. both | |
| 8. |
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. interpretation | |
| 9. |
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. intra‐firm comparison | |
| 10. |
Which of the following is technique of financial statement analysis? |
| A. | common‐size statement |
| B. | comparative statement |
| C. | trend analysis |
| D. | all |
| Answer» D. all | |
| 11. |
________is a simply the amount of cash coming in to a business. |
| A. | cash flow |
| B. | inflow |
| C. | both a and b |
| D. | none of the above. |
| Answer» A. cash flow | |
| 12. |
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. decreases | |
| 13. |
Incorrect cash flow planning can lead to ________ |
| A. | solvency |
| B. | insolvency |
| C. | bankruptcy |
| D. | failure |
| Answer» C. bankruptcy | |
| 14. |
Analysis of any financial Statement comprises |
| A. | balance sheet |
| B. | p&l account |
| C. | trading account |
| D. | all of the above |
| Answer» D. all of the above | |
| 15. |
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. all of the above | |
| 16. |
Interpretation of accounts is the |
| A. | art and science of translating the figures |
| B. | to know financial strengths and weaknesses of a business |
| C. | to know the causes for the prevailing performance of business |
| D. | all of the above |
| Answer» D. all of the above | |
| 17. |
The major device for measuring the profitability of a firm over a defined period of time is the |
| A. | income statement. |
| B. | balance sheet. |
| C. | statement of cash flow. |
| D. | none of the above. |
| Answer» A. income statement. | |
| 18. |
The ________ does not represent continuing operations in any way, but is simply a snapshot of the total worth of a firm at a given point in time. |
| A. | income statement |
| B. | balance sheet |
| C. | sources and uses of funds statement |
| D. | none of the above |
| Answer» B. balance sheet | |
| 19. |
Cash inflows arise from _____ assets, ________ liabilities, and ___________ stockholders' equity. |
| A. | increasing; increasing; decreasing |
| B. | increasing; decreasing; decreasing |
| C. | decreasing; increasing; increasing |
| D. | decreasing; increasing; decreasing |
| Answer» C. decreasing; increasing; increasing | |
| 20. |
Which of the following is NOT a key ratio in the prediction of bankruptcy as developed by Edward Altman? |
| A. | debt to equity |
| B. | current ratio |
| C. | retained earnings as a percent of total assets |
| D. | total assets |
| Answer» A. debt to equity | |
| 21. |
__________ analysis is the process of studying a series of ratios for a company and/or industry over time. |
| A. | dupont |
| B. | trend |
| C. | common size |
| D. | all of the above. |
| Answer» B. trend | |
| 22. |
The statement of cash flows tells us |
| A. | accounting profit or loss |
| B. | how cash was created |
| C. | actual profit or loss |
| D. | two of the above |
| Answer» B. how cash was created | |
| 23. |
The primary sections of a statement of cash flows are: |
| A. | cash flows from investing, operating, and financing activities. |
| B. | cash flows from investing and operating activities plus investments. |
| C. | cash flows from investing, financing, and accounting activities. |
| D. | cash flows from investing, operating, financing, and accounting activities. |
| Answer» A. cash flows from investing, operating, and financing activities. | |
| 24. |
Which of the following are Non-current assets? |
| A. | land, building and plant |
| B. | leasehold property |
| C. | computer software |
| D. | all of the above |
| Answer» D. all of the above | |
| 25. |
Funds flow statements are prepared so as to |
| A. | to identify the changes in working capital |
| B. | to identify reasons behind change in working capital |
| C. | to know the item-wise outflow of funds during given period |
| D. | all of the above |
| Answer» D. all of the above | |
| 26. |
Financial statements are ____________. |
| A. | anticipated facts |
| B. | recorded facts |
| C. | estimated of facts |
| D. | unknown facts |
| Answer» B. recorded facts | |
| 27. |
Trend analysis is significant for ____________. |
| A. | forecasting and budgeting |
| B. | profit planning |
| C. | capital rationing |
| D. | working capital management |
| Answer» B. profit planning | |
| 28. |
In common size income statement analysis, which is taken as 100 percent? |
| A. | sales |
| B. | cost of goods sold |
| C. | purchases |
| D. | total assets |
| Answer» A. sales | |
| 29. |
Comparative statement analysis sheet is __________. |
| A. | vertical analysis |
| B. | horizontal analysis |
| C. | either vertical or horizontal analysis |
| D. | neither vertical nor horizontal analysis |
| Answer» B. horizontal analysis | |
| 30. |
Financial statements are meaningful and useful only when they are ___________. |
| A. | verified |
| B. | presented to owners |
| C. | analyzed and interpreted |
| D. | published |
| Answer» C. analyzed and interpreted | |
| 31. |
Vertical analysis is made on the basis of __________. |
| A. | single set of financial statements |
| B. | multiple sets of financial statements |
| C. | different schedules attached to financial statements |
| D. | similar set of financial statements |
| Answer» A. single set of financial statements | |
| 32. |
Horizontal analysis is done by analyzing ____________. |
| A. | quarterly statement |
| B. | half yearly statement |
| C. | financial statements of several years |
| D. | financial statements of a particular year |
| Answer» D. financial statements of a particular year | |
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