Class 12 Accountancy Chapter 4 (Part 1) – Analysis of financial statements MCQ Question and Answers – MCQs for Practice

1. 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 __________.

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’

3. The term Financial Analysis includes both ____________.

4. The financial statements of a business enterprise include:

5. What is Not Incorrect About Common Size Statements?

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

7. 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.

8. Limitation of Financial Analysis.

9. The most commonly used tools for financial analysis are:

10. Whose analysis will evaluate the ability of the company to meet its short-term obligations & firm’s liquidity position?

11. This is Not a feature of Trend Analysis

12. Common Size Statement is of immense use for ______________.

13. By Analysing Common Size Statements Which Analysis can be Processed?

14. 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?

15. Comparative Statements are also known as:

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

17. The following are the reasons that advocate in favour of Financial Analysis.

18. The main and sole Objective of Analysis of financial statements is to

19. 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?

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