Accounting for Managerial Decisions Solved MCQs

1.

Horizontal Analysis shows the comparison of data for several years against a chosen ---------------- year.

A. Base year
B. Previous year
C. Financial year
D. Calender year
Answer» A. Base year
2.

Vertical analysis is made to review and analyse the financial statements of -----------------accounting period.

A. One
B. Two
C. Three
D. Four
Answer» A. One
3.

Comparison of financial variables of a firm over a period of time is known as--------------

A. Comparative
B. Common-size
C. Trend analysis
D. None of the above
Answer» C. Trend analysis
4.

Interpretation requires analysis and ----------------------------------

A. Comaprison
B. Determination
C. Decision Making
D. Conclusion
Answer» A. Comaprison
5.

The process of deriving conclusions from the analysis is commonly termed as ----------------

A. Analysis
B. Conclusion
C. Comparison
D. Interpretation
Answer» D. Interpretation
6.

Common size Income Statement present the various items as a percentage of ----------------

A. Sales
B. Credit sales
C. Cash sales
D. None of the above
Answer» A. Sales
7.

External analysis is based on ------------- financial statements

A. Annual
B. Published
C. Prepared
D. Previous
Answer» B. Published
8.

Financial Statements provide a summary of --------------------------

A. Accounts
B. Assets
C. Liabilities
D. Expenses
Answer» A. Accounts
9.

When financial statements for a number of years are reviewed and analysed, the analysis is known as ---------------------

A. Vertical nalysis
B. Internal analysis
C. Horizontal analysis
D. External analysis
Answer» C. Horizontal analysis
10.

When ratios are calculated from the financial statements of one year, it is known as ---------------------

A. Horizontal analysis
B. Vertiacal analysis
C. Internal Analysis
D. External analysis
Answer» B. Vertiacal analysis
11.

Horizontal analysis is also known as -----------------------

A. Static analysis
B. Structural analysis
C. Dynamic analysis
D. None of these
Answer» C. Dynamic analysis
12.

Trend analysis is significant for

A. Forecasting and budgeting
B. Profit planning
C. Capital rationing
D. None of the above
Answer» A. Forecasting and budgeting
13.

In trend percentage the base year is ----------------------------

A. The first year
B. Last year
C. Any year
D. Second year
Answer» A. The first year
14.

Comparative statements are a form of ---------------------------

A. Horizontal analysis
B. Vertical analysis
C. Parellel analysis
D. None of the above
Answer» A. Horizontal analysis
15.

The term financial ananlysis include both --------- and interpretation

A. Comparison
B. Analysis
C. Conclusion
D. Constructions
Answer» B. Analysis
16.

Vertical analysis is also known as ------------------

A. Dynamic analysis
B. Static analysis
C. External nalysis
D. Internal analysis
Answer» B. Static analysis
17.

The statement prepared to disclose accounting information are known as-----

A. Comparative statements
B. Common size statements
C. Financial statements
D. None of the above
Answer» C. Financial statements
18.

------------- gives a diagnosis of the profitability and financial position

A. Analysis of financial statements
B. Preparation of financial statements
C. Construction of statements
D. None of the above
Answer» A. Analysis of financial statements
19.

------------------------ helps in drawing inferences of conclusions

A. Analysis
B. Interpretation
C. Comparison
D. None of the above
Answer» B. Interpretation
20.

---------------- establishes the relationship of different individual items which same common items

A. Common size statements
B. Comparative statements
C. Trend analysis
D. Comparative Income Statement
Answer» A. Common size statements
21.

Under ------------------------ each item of expenses taken as a percentage on net sales

A. Comparative income statement
B. Comparative balance sheet
C. Common size Balance sheet
D. Common size Income Statement
Answer» D. Common size Income Statement
22.

----------- helps to disclose financial position

A. Trial Balance
B. Profit and Loss Account
C. Balance sheet
D. Income Statement
Answer» C. Balance sheet
23.

Disclose accounting information

A. Balance sheet
B. Trading account
C. Profit and Loss Account
D. Financial statements
Answer» D. Financial statements
24.

Afford full diagnosis of the profitability and financial position

A. Preparation of Profit and Loss Account
B. Balance Sheet
C. Final Accounts
D. Analysis of financial statements
Answer» D. Analysis of financial statements
25.

Study of the trend of the same items of two or more balance sheets

A. Common size Profit and Loss A/C
B. Common size balance sheet
C. Comparative Income statement
D. Comparative Balance Sheet
Answer» D. Comparative Balance Sheet
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