Accountancy Chapter 4 (Part 1) – Analysis of financial statements MCQ Question Answers for Various Entrance Exams

 

1. The following are the reasons that advocate in favour of Financial Analysis.
a.
b.
c.
d.

2. The process of critical _________ of the financial information contained in the financial statements in order to understand and make decisions regarding the operations of the firm is called ‘Financial Statement Analysis’
a.
b.
c.
d.

3. Limitation of Financial Analysis.
a.
b.
c.
d.

4. The financial statements of a business enterprise include:
a.
b.
c.
d.

5. Who are also interested in the firm’s capital structure to ascertain its influences on firm’s earning, Risk and Also evaluate the efficiency of the management and determine whether a change is needed or not?
a.
b.
c.
d.

6. What is Not Incorrect About Common Size Statements?
a.
b.
c.
d.

7. Whose analysis will evaluate the ability of the company to meet its short-term obligations & firm’s liquidity position?
a.
b.
c.
d.

8. Using the previous years’ data of a business enterprise, __________can be done to observe the percentage changes over time in the selected data.
a.
b.
c.
d.

9. Conclusion base on financial analysis may be non-reliable because financial statement is based on certain concepts and conventions. This Statement Can be Limitation of __________.
a.
b.
c.
d.

10. The term Financial Analysis includes both ____________.
a.
b.
c.
d.

11. Whose analysis help in studying accounting data so as to determine the continuity of the operating policies, investment value of the business, credit ratings and testing the efficiency of operations?
a.
b.
c.
d.

12. Comparative Statements are also known as:
a.
b.
c.
d.

13. Common Size Statement is of immense use for ______________.
a.
b.
c.
d.

14. ___________ describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm.
a.
b.
c.
d.

15. This is Not a feature of Trend Analysis
a.
b.
c.
d.

16. By Analysing Common Size Statements Which Analysis can be Processed?
a.
b.
c.
d.

17. The most commonly used tools for financial analysis are:
a.
b.
c.
d.

18. The main and sole Objective of Analysis of financial statements is to
a.
b.
c.
d.

19. In Which analysis, each item in the statement is stated as a percentage of the aggregate, or revenue from operations of which that item is a part.
a.
b.
c.
d.

20. Trend analysis is important because, with its _________ view, it may point to basic changes in the nature of the business
a.
b.
c.
d.


 


 
Also See : 
 
Accountancy Part 1
 
Accountancy Chapter 1 (Part 1) – Accounting for share capital MCQs
 
Accountancy Chapter 2 (Part 1) – Accounting for partnership: basic concepts MCQs
 
Accountancy Chapter 3 (Part 1) – Financial statements of a company MCQs
 
Accountancy Chapter 5 (Part 1) – Accounting ratios MCQs
 
Accountancy Chapter 6 – Cash flow statement MCQs
 
Accountancy Part 2
 
Accountancy Chapter 1 (Part 2) – Accounting for not for profit organisation MCQs
 
Accountancy Chapter 2 (Part 2) – Issue and redemption of debentures MCQs
 
Accountancy Chapter 3 (Part 2) – Reconstitution of a partnership firm – admission of a partner MCQs
 
Accountancy Chapter 4 (Part 2) – Retirement/death of a partner MCQs
 
Accountancy Chapter 5 (Part 2) – Dissolution of partnership firm MCQs