

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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