Bihar Board 12th Accountancy Objective Questions and Answers
Bihar Board 12th Accountancy Objective Answers Chapter 9 Analysis of Financial Statements
Question 1.
Vertical Analysis is also known as :
(A) Fluctuation Analysis
(B) Static Analysis
(C) Horizontal Analysis
(D) None of these
Answer:
(B) Static Analysis
Question 2.
Financial analysis is useful:
(A) For Investors
(B) For Shareholders
(C) For Debentureholders
(D) All the above
Answer:
(D) All the above
Question 3.
Analysis of financial statements involve :
(A) Trading A/c
(B) Profit & Loss statement
(C) Balance Sheet
(D) All the above
Answer:
(D) All the above
Question 4.
Financial anaysis is significant because it:
(A) Ignores qualitative aspect
(B) Judges operational efficiency
(C) Suffers from the limitations of financial statements
(D) It is affected by personal ability and bias of the analysis
Answer:
(B) Judges operational efficiency
Question 5.
What is shown by the Income Statement ?
(A) Accuracy of books of accounts
(B) Profit or loss of a certain period
(C) Balance of Cash Bookd
(D) None of these
Answer:
(B) Profit or loss of a certain period
Question 6.
What is shown by Balance Sheet ?
(A) Accuracy of books of accounts
(B) Profit or loss of a specific period
(C) Financial position on a specific date
(D) None of the above
Answer:
(C) Financial position on a specific date
Question 7.
Which of the following is the purpose or objective of financial analysis ?
(A) To assess the current profitability of the firm
(B) To measure the solvency of the firm
(C) To assess the short-term and long-term liquidity position of the firm
(D) All the above
Answer:
(D) All the above
Question 8.
Out of the following which parties are interested in financial statements ?
(A) Managers
(B) Financial Institutions
(C) Creditors
(D) All the these
Answer:
(D) All the these
Question 9.
Which of the following is not a limitations of financial statement analysis ?
(A) To meausre the financial strength
(B) Affected by window-dressing
(C) Do not reflect changes in price level
(D) Lack of Qualitative Analysis
Answer:
(A) To meausre the financial strength
Question 10.
Break-even Analysis shows:
(A) Relationship between cost and sales
(B) Relationship between production and purchases
(C) Relationship between cost and revenue
(D) None of these
Answer:
(A) Relationship between cost and sales
Question 11.
Which of the following shows the actual financial position of n enterprise ?
(A) Fund Flow
(B) Balance Sheet
(C) P & L A/c
(D) Ratio Analysis
Answer:
(B) Balance Sheet
Question 12.
The financial statements of a business enterprise include:
(A) Balance Sheet
(B) Profit & Loss Account
(C) Cash Flow Statement
(D) All the above
Answer:
(D) All the above
Question 13.
An annual report is issued by company to its :
(A) Directors
(B) Auditors
(C) Shareholders
(D) Management
Answer:
(C) Shareholders
Question 14.
Balance Sheet provides information about financial position of the enterprise :
(A) At a Point of Time
(B) Over a Period of Time
(C) For a Period of Time
(D) None of the above
Answer:
(A) At a Point of Time
Question 15.
Profit & Loss Account is also called :
(A) Balance Sheet
(B) Income Statements
(C) Operating Profit
(D) Investment
Answer:
(B) Income Statements
Question 16.
Which of the following statement is correct ?
(A) Assets = Liabilities + Shareholders funds
(B) Assets = Total funds
(C) Assets = Funds of outsiders .
(D) None of the above
Answer:
(A) Assets = Liabilities + Shareholders funds
Question 17.
In which meeting of company directors report is presented ?
(A) Directors Meeting
(B) Annual General Meeting
(C) Manager’s Meeting
(D) All of the above
Answer:
(B) Annual General Meeting
Question 18.
On the basis of process, which of the following is the type of financial analysis ?
(A) Horizontal Analysis
(B) Vertical Analysis
(C) Ratio Analysis
(D) (a) and (b) both
Answer:
(D) (a) and (b) both
Question 19.
Which Of the following is limitation of financial analysis ?
(A) Window-dressing
(B) Basis of Valuation
(C) Lack of Accuracy
(D) All the above
Answer:
(D) All the above
Question 20.
Which of the following is not the limitations of financial analysis ?
(A) Lack of Accuracy
(B) Based on Historical facts
(C) Basis of Valuation
(D) Information of Profit and Loss
Answer:
(D) Information of Profit and Loss
Question 21.
When Financial Statements of two or more organisations are analysed, it is called :
(A) Intra-firm Analysis
(B) Inter-firm Analysis
(C) Vertical Analysis
(D) None of these
Answer:
(B) Inter-firm Analysis
Question 22.
Which of the following statement correct ?
(A) Retained Earnings = Total Income
(B) Retained Earnings = Revenue-expenses
(C) Retained Earnings = Gross Profit
(D) None of the above
Answer:
(B) Retained Earnings = Revenue-expenses
Question 23.
Which of the following is a type of Financial Analysis on the basis of material used ?
(A) Internal Analysis
(B) External Analysis
(C) Internal Audit
(D) Both (a) and (b)
Answer:
(D) Both (a) and (b)
Question 24.
Interpretation of Financial Statements includes:
(A) Criticisms and Analysis
(B) Comparison and Trend Study
(C) Drawing Conclusion
(D) All the above
Answer:
(D) All the above
Question 25.
Horizontal Analysis is also known as :
(A) Dynamic Analysis
(B) Structural Analysis
(C) Static Analysis
(D) None of these
Answer:
(A) Dynamic Analysis
Question 26.
Vertical Analysis is also known as :
(A) Static Analysis
(B) Dynamic Analysis
(C) Strctural Analysis
(D) None of these
Answer:
(A) Static Analysis
Question 27.
Comparative Statements are also known as :
(A) Dynamic Analysis
(B) Horizontal Analysis
(C) Vertical Analysis
(D) External Analysis
Answer:
(B) Horizontal Analysis
Question 28.
Common-size Statement are also known as:
(A) Dynamic Analysis
(B) Horizontal Analysis
(C) Vertical Analysis
(D) External Analysis
Answer:
(C) Vertical Analysis
Question 29.
The most commonly used tools for financial analysis are:
(A) Comparative Statements
(B) Common-size Statement
(C) Accounting Ratios
(D) All the above
Answer:
(D) All the above
Question 30.
The analysis of financial statement by a shareholder is an example of:
(A) External Analysis
(B) Internal Analysis
(C) Vertical Analysis
(D) Horizontal Analysis
Answer:
(A) External Analysis
Question 31.
For calculating trond percentages any year is selected as:
(A) Current year
(B) Previous year
(C) Base year
(D) None of these
Answer:
(C) Base year
Question 32.
Tools for comparison of financial statements are :
(A) Comparative Balance Sheet
(B) Comparative Income Statement
(C) Common-size Statement
(D) All the above
Answer:
(D) All the above
Question 33.
Trend ratios and trend percentage are used in :
(A) Dynamic analysis
(B) Static analysis
(C) Horizontal analysis
(D) Vertical Analysis
Answer:
(C) Horizontal analysis
Question 34.
Comparative Financial Statements show:
(A) Financial position of a concern
(B) Earning capacity of a concern
(C) Both of them
(D) None of these
Answer:
(C) Both of them
Question 35.
Comparative financial analysis process shows the comparison between the items of which statement:
(A) Balance Sheet
(B) Profit & Loss Statement
(C) (a) and (b) both
(D) None of these
Answer:
(C) (a) and (b) both
Question 36.
Which of these are not the method of financial statement analysis ?
(A) Ratio Analysis
(B) Comparative Analysis
(C) Trend Analysis
(D) Capitalisation Method
Answer:
(D) Capitalisation Method
Question 37.
Common-size financial statements are mostly prepared:
(A) In proportion
(B) In percentage
(C) (a) and (b) both
(D) None of these
Answer:
(B) In percentage
Question 38.
Tangible assets of company increased from T 4,00,000 to T 5,00,000. What is the percentage of change ?
(A) 20%
(B) 25%
(C) 33%
(D) 50%
Answer:
(B) 25%
Question 39.
A company’s shareholders fund was 7 8,00,000 in the year 2015. It because 7 12,00,000 in the year 2016. What is percentage of change ?
(A) 100%
(B) 25%
(C) 50%
(D) 33.3%
Answer:
(C) 50%
Question 40.
A company’s net sales are ₹ 15,00,000; cost of sales is ₹ 10,00,000 and indirect expenses are ₹ 3,00,000, the amount gross profit will be:
(A) ₹ 13,00,000
(B) ₹ 5,00,000
(C) ₹ 2,00,000
(D) ₹ 12,00,000
Answer:
(C) ₹ 2,00,000
Question 41.
Sales less Cost of goods sold is called :
(A) Operating Profit
(B) Gross Profit
(C) Net Profit
(D) Total Profit
Answer:
(B) Gross Profit
Question 42.
If total assets of a firm are 7 12^00,000 and its non of non-current assets to total assets ?
(A) 50%
(B) 75%
(C) 25%
(D) 80%
Answer:
(B) 75%
Question 43.
If total assets of a firm are 7 10,00,000 and its non-current assets are 7 6,00,000, what will be the percentage of current assets on total assets ?
(A) 60%
(B) 50%
(C) 40%
(D) 30%
Answer:
(C) 40%
Question 44.
In a common-size Balance Sheet, total equity and liabilities are assumed to be equal to :
(A) 1,000
(B) 100
(C) 10
(D) 1
Answer:
(B) 100
Question 45.
Break-even point refers to that point where :
(A) Total Costs are more than Total Sales
(B) Total Costs are less than Total Sales
(C) Total Costs are half of the Total Sales
(D) Total Cost ae equal to total sales
Answer:
(D) Total Cost ae equal to total sales
Question 46.
Payment of Income Tax is considered as :
(A) Direct Expenses
(B) Indirect Expeness
(C) Operating Expenses
(D) None of these
Answer:
(B) Indirect Expeness