McqMate
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 |
51. |
The asset, the amount of which can be realized within a period of one year are known as ---------------- |
A. | Current liability |
B. | Current asset |
C. | Liquid liability |
D. | Fixed asset |
Answer» B. Current asset |
52. |
The ideal current ratio is ------------- |
A. | 2:1 |
B. | 1:1 |
C. | 1:2 |
D. | 1:3 |
Answer» A. 2:1 |
53. |
The ratio which shows the relationship between borrowed funds and owners capital is --------------- |
A. | Proprietary ratio |
B. | Debt equity ratio |
C. | Capital gearing ratio |
D. | Fixed asset ratio |
Answer» B. Debt equity ratio |
54. |
Proprietary ratio measures the relationship between share holder fund and ------------------ |
A. | Total asset |
B. | Fixed asset |
C. | Current asset |
D. | Fictious asset |
Answer» A. Total asset |
55. |
The relationship between total outside liabilities and total assets can be indicated through ------------ |
A. | Fixed asset ratio |
B. | Solvency ratio |
C. | Fixed asset turn over ratio |
D. | Proprietary ratio |
Answer» B. Solvency ratio |
56. |
Debt service ratio is also known as -------------- |
A. | Interest coverage ratio |
B. | Dividend payout ratio |
C. | Solvency ratio |
D. | Debtors turn over ratio |
Answer» A. Interest coverage ratio |
57. |
Debt equity ratio is an example of ---------------- ratios |
A. | Balance sheet ratio |
B. | Profit & loss account ratio |
C. | Mixed ratio |
D. | Liquidity ratio |
Answer» A. Balance sheet ratio |
58. |
Income tax payable come under ------------------ |
A. | Long term liability |
B. | Long term fund |
C. | Current liability |
D. | Other liabilities |
Answer» C. Current liability |
59. |
Stock and prepaid expanses are not included in ---------------- |
A. | Current asset |
B. | Fixed asset |
C. | Current liability |
D. | Quick asset |
Answer» D. Quick asset |
60. |
In a sound business, acid test ratio ------------------- is considered satisfactory |
A. | 1:2 |
B. | 2:1 |
C. | 1:1 |
D. | 0.5:1 |
Answer» C. 1:1 |
61. |
Cost of good sold+operating expanses=------------------------- |
A. | Total cost |
B. | Cost of product |
C. | Cost of sales |
D. | Operating cost |
Answer» D. Operating cost |
62. |
Example of activity ratios ------------------------ |
A. | Gross profit ratio |
B. | Net profit ratio |
C. | Operating ratio |
D. | Stock turn over ratio |
Answer» D. Stock turn over ratio |
63. |
Example of leverage ratio |
A. | Debtors velocity |
B. | Stock turnover ratio |
C. | Current ratio |
D. | Solvency ratio |
Answer» D. Solvency ratio |
64. |
Current ratio is an example of -------------------- |
A. | Leverage ratio |
B. | Liquidity ratio |
C. | Activity ratio |
D. | Turnover ratio |
Answer» B. Liquidity ratio |
65. |
Stock turn over ratio is an example of ------------------- |
A. | Liquidity ratio |
B. | Leverage ratio |
C. | Profitability ratios |
D. | Activity ratios |
Answer» D. Activity ratios |
66. |
Ratio analysis is a study of relationship among various --------------- factors in a business |
A. | Operational |
B. | Official |
C. | Financial |
D. | Others |
Answer» C. Financial |
67. |
Liquidity ratios measure the --------- solvency of a firm |
A. | Long term |
B. | Short term |
C. | Average |
D. | Others |
Answer» B. Short term |
68. |
By computing current ratio ---------------- solvency of a concern is assessed |
A. | Short term |
B. | Long term |
C. | Liquidity |
D. | Profitability |
Answer» A. Short term |
69. |
---------------- ratio studies the firm’s ability to meet its long term financial position |
A. | Liquidity ratio |
B. | Profitability |
C. | Activity |
D. | Leverage |
Answer» D. Leverage |
70. |
Satisfactory level of debt equity ratio is -------------------- |
A. | 1:1 |
B. | 3:1 |
C. | 2:1 |
D. | 1:2 |
Answer» C. 2:1 |
71. |
Operating ratio establishes the relationship between --------------- and net sales |
A. | Cost of goods sold |
B. | Cost of sales |
C. | Cost of production |
D. | Operating cost |
Answer» D. Operating cost |
72. |
For dividend yield ratio -------------- price of the equity shares is taken into consideration |
A. | Market |
B. | Cash |
C. | Cost |
D. | None of the above |
Answer» A. Market |
73. |
Coverage of fixed assets by shareholder’s equity is a good tests of---------------- |
A. | solvency |
B. | liquidity |
C. | Activity |
D. | profitability |
Answer» A. solvency |
74. |
Net worth refers to owner’s-------------------------- |
A. | Equity |
B. | Solvency |
C. | Liability |
D. | None of these |
Answer» A. Equity |
75. |
Ratio to assess the short term debt paying capacity of a firm is---------- |
A. | Debt equity ratio |
B. | Propriety ratio |
C. | Liquid ratio |
D. | Solvency ratios |
Answer» C. Liquid ratio |
76. |
The ratio which is used to ascertain the soundness of the long term financial position is------------ |
A. | Debt equity ratio |
B. | Liquidity ratio |
C. | Activity ratio |
D. | Gross profit ratio |
Answer» A. Debt equity ratio |
77. |
If the current assets and working capital of a company are rs.80,000 and rs.50000 then current liability will be------------- |
A. | Rs.1,00,000 |
B. | Rs.1,30,000 |
C. | Rs.70000 |
D. | Rs.30000 |
Answer» D. Rs.30000 |
78. |
The ratio which is a good indicator to maintain the correct selling price and efficiency of trading activity is------ |
A. | Net profit ratio |
B. | Gross profit ratio |
C. | Current ratio |
D. | Liquid ratios |
Answer» B. Gross profit ratio |
79. |
Return on investment is a---------------- |
A. | Profit and loss account ratio |
B. | Balance sheet ratio |
C. | Combined ratio |
D. | Position statement ratio |
Answer» C. Combined ratio |
80. |
Debtors turnover ratio also known as---------- |
A. | Payable turnover |
B. | Receivable turnover ratio |
C. | Creators turnover ratio |
D. | Debtors velocity |
Answer» B. Receivable turnover ratio |
81. |
The operating profit and net sale of a firm are rs.2,00,000 and rs.10,00,000 respectively then operating ratio will be |
A. | 20% |
B. | 5% |
C. | 50% |
D. | 20% |
Answer» A. 20% |
82. |
The ratio which indicates how quickly debtors are converted into cash is--------- |
A. | Receivable turnover ratio |
B. | Inventory turnover ratio |
C. | Working capital turnover ratio |
D. | Creditors turnover ratio |
Answer» A. Receivable turnover ratio |
83. |
Net capital employed is equal to --------------- |
A. | Total assets minus liabilities |
B. | Fixed asset plus net working capital |
C. | Total asset minus long-term liabilities |
D. | Total assets |
Answer» B. Fixed asset plus net working capital |
84. |
Ratio of net profit before interest and tax to sales is------------------------------ |
A. | Solvency ratio |
B. | Capital gearing |
C. | Operating profit ratio |
D. | None of these |
Answer» C. Operating profit ratio |
85. |
Lower stock turnover ratio indicates------------------------------- |
A. | Solvency position |
B. | Monopoly situation |
C. | Over investment in inventory |
D. | None of these |
Answer» C. Over investment in inventory |
86. |
Collection of book debts----- |
A. | Has no effect on current ratio |
B. | Has decreased in current ratio |
C. | Has increased in current ratio |
D. | None of these |
Answer» A. Has no effect on current ratio |
87. |
Debt equity ratio is a-------------------------------------- |
A. | Profitability ratio |
B. | Turnover ratio |
C. | Short term solvency ratio |
D. | Long term solvency ratio |
Answer» D. Long term solvency ratio |
88. |
Market price per share divided by earnings per share is------- |
A. | Price earning ratio |
B. | Return on equity |
C. | Market test ratio |
D. | Book value per share |
Answer» A. Price earning ratio |
89. |
Solvency ratio indicates----------------- |
A. | Credit worthiness |
B. | Activity |
C. | Profitability |
D. | None of these |
Answer» A. Credit worthiness |
90. |
Current ratio shows----- |
A. | The change in gross profit |
B. | The working capital position |
C. | The liquidity of assets |
D. | The change in net profit |
Answer» B. The working capital position |
91. |
Current ratio is 4:1, the amount of current liabilities is Rs.12000 the amount of working capital is----- |
A. | Rs.48,000 |
B. | Rs.36000 |
C. | Rs.30000 |
D. | Rs.60000 |
Answer» A. Rs.48,000 |
92. |
Stock turnover ratio is used to determine -----------------------of an enterprise |
A. | Profitability |
B. | Liquidity& solvency |
C. | Efficiency |
D. | Growth |
Answer» C. Efficiency |
93. |
Working capital is expressed as------ |
A. | Current asset-fixed asset |
B. | Fixed assets-current liabilities |
C. | Current assets-current liabilities |
D. | None of these |
Answer» C. Current assets-current liabilities |
94. |
Dividend yield is an example for------ratio |
A. | Solvency |
B. | Liquidity |
C. | Market strength |
D. | Net worth |
Answer» C. Market strength |
95. |
Debtors turnover ratio is used to calculate------ |
A. | efficiency |
B. | solvency |
C. | liquidity |
D. | profitability |
Answer» A. efficiency |
96. |
Rol measures----- |
A. | Profitability in relation to investment |
B. | Profitability in relation to sales |
C. | Operating efficiency |
D. | Long term solvency |
Answer» A. Profitability in relation to investment |
97. |
Debtors turnover ratio measures---------- |
A. | Short term solvency |
B. | Operating efficiency |
C. | Long term solvency |
D. | Credit policy |
Answer» D. Credit policy |
98. |
Fund flow refers to change in----- |
A. | Working capital |
B. | Fixed capital |
C. | Current capital |
D. | Increase in working capital |
Answer» A. Working capital |
99. |
Depreciation is sometimes treated as -------of funds |
A. | Outflow |
B. | Use |
C. | Source |
D. | No change |
Answer» C. Source |
100. |
Salary outstanding is----- of funds |
A. | Source |
B. | Inflow |
C. | Application |
D. | No change |
Answer» C. Application |
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