Financial Statements And Their Analysis CBSE Questions & Answers

Financial Statements And Their Analysis

This is Accountancy Class 12 Financial Statements and their Analysis CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
Which of the following items appear in the Balance sheet
  • A
    Depreciation
  • B
    Employees benefit expenses
  • C
    Sales
  • D
    Debentures
    Correct
2
Which of the following items appear in the Statement of Profit and Loss
  • A
    Trade payables
  • B
    Sales
    Correct
  • C
    Creditors
  • D
    Goodwill
3
The information available from the Analysis, serves which of the following sections
  • A
    Economist and Researchers
  • B
    All of these
    Correct
  • C
    Potential Investors
  • D
    Stock Exchange
4
When analysis is made on the basis of Published statements, reports and information then this is known as
  • A
    Internal Analysis
  • B
    External analysis
    Correct
  • C
    Vertical Analysis
  • D
    Horizontal analysis
5
The following are the tools of financial statement analysis except
  • A
    Ratio Analysis, Fund
  • B
    Trend Flow
    Correct
  • C
    Flow Statement
  • D
    Cash flow statement
6
Financial Statement Analysis is done by the:
  • A
    Creditors
  • B
    Investors
  • C
    All of these
    Correct
  • D
    Government
7
Objective of Financial Statement Analysis is to
  • A
    To measure the profitability of the business
  • B
    To measure the financial strength of the business
  • C
    To make comparative study within the firm and with other forms
  • D
    All
    Correct
8
Following are the limitations of financial analysis except
  • A
    Don't reflect changes in price level.
  • B
    Single years' Analysis of financial statement have limited use.
  • C
    Affected by the personal ability and bias of the Analyst
  • D
    To make comparative study within the firm and with other forms
    Correct
9
Common size statements is an example
  • A
    Internal Analysis
  • B
    External analysis
  • C
    Vertical Analysis
    Correct
  • D
    Horizontal analysis
10
Analysis of Financial statements suffered from the limitation of window as company
  • A
    show items at incorrect value to portray better profitability
  • B
    All of these
    Correct
  • C
    may overvalue closing stock to show higher profits
  • D
    hide some vital information
11
What is the interest of Shareholders in the analysis of Financial Statements
  • A
    None of these
  • B
    They want to judge the safety of their investment
  • C
    They want to judge the present and future earning capacity of the business.
  • D
    Both of these
    Correct
12
Horizontal Analysis is:
  • A
    None of these
  • B
    Probability Analysis
  • C
    Cross Section analysis
  • D
    Time Series Analysis
    Correct
13
Comparative Financial Statement is an example of
  • A
    Vertical Analysis
  • B
    External analysis
  • C
    Horizontal analysis
    Correct
  • D
    Internal Analysis
14
Following Items that can be shown as contingent Liabilities in a company‘s Balance sheet except
  • A
    Claims against the Company not acknowledged as debts.
  • B
    Uncalled Liability on partly paid shares.
  • C
    Arrears of Dividend on Cumulative preference shares
  • D
    Advance to Subsidiaries
    Correct
15
Analysis conducted by the investors and creditors is known as:
  • A
    Horizontal analysis
  • B
    External analysis
    Correct
  • C
    Time series analysis
  • D
    Cross sectional analysis