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

Name the process which process of identifying the financial strength and weaknesses of the firm by establishing the relationship between the items of the Balance Sheet and income statement

A
Financial statement
B
Income statement
C
Analysis of Financial statement
Correct
D
All of these

Internal Analysis means

A
Based upon the information available to business
Correct
B
is made on the basis of Published statements
C
None
D
Both

It helps in ascertaining change in the items of income statement and Position Statement of different years in terms of figures and percentage

A
Trend Analysis
B
Common Size statements
C
Comparative statements
Correct
D
Ratio Analysis

These are the liabilities which are not liabilities on the date but may arise upon the happening of a certain event are called

A
Contingent Liabilities
Correct
B
Current Liabilities
C
Shareholder’s Fund
D
Non current liabilities

Income statement represents:

A
None of these
B
Statement of Profit and Loss
Correct
C
Profit and Loss Appropriation Account
D
Cash Flow Statement

Loose Tools, Stock-in-Trade, Stores and Spare Parts comes under the

A
Trade Receivables
B
Inventories
Correct
C
Cash and Cash Equivalents
D
Other Current Assets

How is a Company‘s balance sheet different from that of a Partnership firm

A
Both of these
Correct
B
In case of a company‘s Balance sheet previous year‘s figures are required to be given whereas it is not so in the case of a partnership firms balance sheet
C
None of these
D
For company‘s Balance Sheet there are two standard forms prescribed under the companies Act.1956 .Whereas, there is no standard form prescribed under the Indian partnership Act,1932 for a partnership Firms balance sheet

Study of relationship between various items is known

A
Common Size statements
B
Trend Analysis
C
Ratio Analysis
Correct
D
Comparative statements

It shows sources inflow and Outflow of cash

A
Fund Flow Statement
B
Ratio Analysis
C
Cash Flow Statement
Correct
D
Trend Analysis

Name the expenses which refer to the indirect expenses relating to the principal revenue generating activities of the enterprise

A
Operating Expenses
Correct
B
Miscellaneous Expenses
C
Non Operating Expenses
D
Sales Expenses

Following items are the example of operating expenses except

A
Bad debts and Provision for doubtful debts
B
Selling and Distribution expenses
C
Cash discount allowed to customers
D
Loss on sale of fixed assets
Correct

While obtaining Gross profit, we deduct _____ from net sales

A
Cost of goods sold
Correct
B
Opening stock and purchases
C
Closing stock
D
Direct expenses

Why government is interested in analysis financial statement

A
To know the liquidity of business
B
To know the earning capacity
C
To know which industry is developing which need help
Correct
D
To know whether the business is able to pay debt

Why public interested in analyzing financial statement

A
To know the liquidity of business
B
To know whether the business is able to pay debt
C
For their own point of view i.e. economist ,consumers
Correct
D
To know the earning capacity

An amount receivable for sale of goods or services rendered in the ordinary course of business is classified as

A
Trade Purchase
B
Trade sales
C
Trade Payables
D
Trade Receivable
Correct