McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
| 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 | |
| 26. |
Expressed as a percentage of each asset to total |
| A. | Common size P/L A/C |
| B. | Common size Balance Sheet |
| C. | Comparative Income Statement |
| D. | Trend analysis |
| Answer» B. Common size Balance Sheet | |
| 27. |
Ratios of different items for various periods are calculated and compared |
| A. | Common size |
| B. | Comparative |
| C. | Trend analysis |
| D. | Ratio analysis |
| Answer» D. Ratio analysis | |
| 28. |
Yard stick which measures relationship between two variables |
| A. | Financial statements |
| B. | Ratio |
| C. | Fund Flow analysis |
| D. | Cash flow analysis |
| Answer» B. Ratio | |
| 29. |
The ratio which depicts the relationship between two items,one of which is drawn from the Balance Sheet and the other from the revenue account |
| A. | Current ratio |
| B. | Equity Ratio |
| C. | Net Profit ratio |
| D. | Debtors Turn over Ratio |
| Answer» D. Debtors Turn over Ratio | |
| 30. |
The ratio of liquid asset to current liabilities |
| A. | Quick ratio |
| B. | Current ratio |
| C. | Absolute liquid ratio |
| D. | Combined ratio |
| Answer» A. Quick ratio | |
| 31. |
Equity includes -------------- |
| A. | Equity share capital |
| B. | Equity share capital+Preference share capital+-fictitious asset |
| C. | Equity capital+Prefernce share capital+reserves snd surplus-fictious asset |
| D. | Equity capital+Preference share capital |
| Answer» C. Equity capital+Prefernce share capital+reserves snd surplus-fictious asset | |
| 32. |
The ratio which shows the relationship b/w share holder’s fund and total assets |
| A. | Debit equity ratio |
| B. | Proprietary ratio |
| C. | Solvency ratio |
| D. | Fixed asset |
| Answer» B. Proprietary ratio | |
| 33. |
Long term solvency of a firm can be measured by |
| A. | Current ratio |
| B. | Net profit ratio |
| C. | Gross profit ratio |
| D. | Debt equity ratio |
| Answer» D. Debt equity ratio | |
| 34. |
The ratio that shows the relationship between fixed asset to share holders fund |
| A. | Fixed asset to net worth |
| B. | Fixed asset ratio |
| C. | Fixed assets turn over ratio |
| D. | Net worth ratio |
| Answer» A. Fixed asset to net worth | |
| 35. |
The index of efficiency and profitability of the business |
| A. | Operating ratio |
| B. | Operating profit ratio |
| C. | Expense ratio |
| D. | Net profit ratio |
| Answer» D. Net profit ratio | |
| 36. |
The ratio that includes whether investment in inventory is efficiently used or not |
| A. | Inventory turnover ratio |
| B. | Working capital turn over ratio |
| C. | Fixed asset turn over ratio |
| D. | Activity ratio |
| Answer» A. Inventory turnover ratio | |
| 37. |
Comparison and interpretation of ratio is known as --------------------- |
| A. | Fund flow analysis |
| B. | Cash flow analysis |
| C. | Ratio analysis |
| D. | Trend analysis |
| Answer» C. Ratio analysis | |
| 38. |
Powerful tool for analyzing financial statement is ---------- |
| A. | Trend analysis |
| B. | Ratio analysis |
| C. | Analysis |
| D. | Interpretation |
| Answer» B. Ratio analysis | |
| 39. |
The relationship between two amount or variables is measured with the help of ------------ |
| A. | Ratio |
| B. | Trend |
| C. | Comparative |
| D. | Common size |
| Answer» A. Ratio | |
| 40. |
The main aim of the ratio analysis is to help the ----------of the firm |
| A. | Owners |
| B. | Officials |
| C. | Departments |
| D. | Management |
| Answer» D. Management | |
| 41. |
Ratios indicate trends in important items and this helps in ----------- |
| A. | Forecasting |
| B. | Reporting |
| C. | Analyzing |
| D. | Interpreting |
| Answer» A. Forecasting | |
| 42. |
Ratios help the management in evolving market strategies through ----------- |
| A. | Inter firm comparison |
| B. | Intra firm comparison |
| C. | Ratios |
| D. | None of the above |
| Answer» A. Inter firm comparison | |
| 43. |
Ratios may be used as a measure of ------------- |
| A. | Effiency |
| B. | Solvency |
| C. | Profitability |
| D. | None of the above |
| Answer» A. Effiency | |
| 44. |
An example of Balance Sheet ratio is --------------- |
| A. | Net profit ratio |
| B. | Inventory turn over ratio |
| C. | Current ratio |
| D. | Fixed asset turn over ratio |
| Answer» C. Current ratio | |
| 45. |
Income statement ratios are also called ----------- |
| A. | Operating ratio |
| B. | Liquidity ratio |
| C. | Activity ratio |
| D. | Trend ratio |
| Answer» A. Operating ratio | |
| 46. |
Leverage ratios are also known as -------------- ratios |
| A. | Short term solvency ratios |
| B. | Long term solvency ratios |
| C. | Solvency ratio |
| D. | Liquidity ratio |
| Answer» B. Long term solvency ratios | |
| 47. |
The ratios that shows tha capacity of the business unit to meet its short term obligation out of its short term resources is known as -------------- |
| A. | Solvency ratio |
| B. | Leverage ratio |
| C. | Liquidity ratio |
| D. | Trend Ratio |
| Answer» C. Liquidity ratio | |
| 48. |
The ratio that highlight the end result of business activities are known as ---------------- ratios |
| A. | Liquidity |
| B. | Leverage |
| C. | Activity |
| D. | Profitability |
| Answer» D. Profitability | |
| 49. |
The efficiency of the management can be measured with the help of ------------------ |
| A. | Activity ratio |
| B. | Leverage ratio |
| C. | Liquidity ratio |
| D. | Profitability ratio |
| Answer» A. Activity ratio | |
| 50. |
The ratio of current asset to currnt liability is known as -------------- |
| A. | Liquid ratio |
| B. | Current ratio |
| C. | Absolute liquid ratio |
| D. | Turn over ratio |
| Answer» B. Current ratio | |
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