This quiz works best with JavaScript enabled. Home > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Out of Operating Profit before Interest/Net Sales and Operating Profit after Interest/Net Sales, which is a better indicator for comparing two identical units? A) Operating Profit after Interest/Net Sales. B) Operating Profit before Interest/Net Sales. C) Both can be used. D) None of the above. Show Answer Correct Answer: B) Operating Profit before Interest/Net Sales. 2. The going-concern assumption, that the entity in question will remain in business for an indefinite period of time A) True. B) False. Show Answer Correct Answer: A) True. 3. Calculate the Return on Equity if the Net income is $ 7, 009 and the shareholder's equity is $ 20, 316. A) 27.44%. B) 41.72%. C) 34.5%. D) 39.42%. E) 30.2%. Show Answer Correct Answer: C) 34.5%. 4. A company has done everything possible to control merchandise costs. To maintains its gross margin, its only altrnative is to sell more merchandise A) True. B) False. Show Answer Correct Answer: B) False. 5. Finance can be defined as A) The system of debits and credits. B) The science of the production, distribution, and consumption of wealth. C) The art and science of managing money. D) The art of merchandising products and services. Show Answer Correct Answer: C) The art and science of managing money. 6. What does the fixed assets turnover ratio measure? A) How many times inventory is turned over during the year. B) The average length of time the firm must wait after making a sale before it receives cash. C) How effectively the firm uses its plant and equipment. D) How effectively the firm uses its total assets. Show Answer Correct Answer: C) How effectively the firm uses its plant and equipment. 7. Component percentages indicate the relative size of each item included in a total. Which of the following statements is true? A) Income statement items are expressed as a percentage of net income, while balance sheet items are expressed as a percentage of total assets. B) Income statement items are expressed as a percentage of sales, while balance sheet items are expressed as a percentage of total assets. C) Income statement items are expressed as a percentage of net income, while balance sheet items are expressed as a percentage of net assets. D) Both income statement and balance sheet items are expressed as a percentage of net assets. Show Answer Correct Answer: B) Income statement items are expressed as a percentage of sales, while balance sheet items are expressed as a percentage of total assets. 8. Following item will not appear under Owner's Fund in Balance Sheet A) Equity Share Capital. B) Security Premium. C) Preference Share Capital. D) Debentures. Show Answer Correct Answer: D) Debentures. 9. What does PPE stand for? A) Payable, Property, and Equipment. B) Prepaid, Property, and Expenses. C) Prepaid, Property, and Equipment. D) Plant, Property and Equipment. Show Answer Correct Answer: D) Plant, Property and Equipment. 10. After receipt of Audited Financial Statements, the first action required to be taken by the credit officers is? A) Confirm about the genuineness of the financial statements. B) Preparation of CMA. C) CRA Rating is to be carried out. D) Discuss the performance with the unit. Show Answer Correct Answer: A) Confirm about the genuineness of the financial statements. 11. Modifying a benchmark is an option for a business that fails to achieve its benchmark. A) True. B) False. Show Answer Correct Answer: A) True. 12. What information does the balance sheet provide? A) The balance sheet provides information about a company's financial position. B) The balance sheet provides information about a company's customer satisfaction levels. C) The balance sheet provides information about a company's employee salaries. D) The balance sheet provides information about a company's marketing strategies. Show Answer Correct Answer: A) The balance sheet provides information about a company's financial position. 13. In the near term, the important ratios that provide the information critical to the short-run operation of the firm are: A) Liquidity, activity, and profitability. B) Liquidity, activity, and debt. C) Liquidity, activity, and equity. D) Activity, debt, and profitability. Show Answer Correct Answer: A) Liquidity, activity, and profitability. 14. Cash Flow Statement consists the cash flows from the ..... activities? A) Operating Activities. B) Investing Activities. C) Financing Activities. D) All of above. Show Answer Correct Answer: D) All of above. 15. All of the following are asset utilization ratios except: A) Average collection period. B) Inventory turnover. C) Receivables turnover. D) Return on assets. Show Answer Correct Answer: D) Return on assets. 16. Gross margin can be increased by A) Selling more merchandise. B) Buying less merchandise. C) Increasing unit sales prices. D) Reducing operating expenses. Show Answer Correct Answer: C) Increasing unit sales prices. 17. Horizontal analysis is also known as A) Linear analysis. B) Vertical analysis. C) Trend analysis. D) Common size analysis. Show Answer Correct Answer: C) Trend analysis. 18. True or False:DuPont analysis can help investors understand how a company is generating its ROE A) True. B) False. Show Answer Correct Answer: A) True. 19. Below are the users of financial statements except..... A) Salesman. B) Investor. C) Government. D) Creditors. Show Answer Correct Answer: A) Salesman. 20. Working Capital = Current Assets Less? A) Quick Liabilities. B) Non-Quick Liabilities. C) Current Liabilities. D) Loan Fund. Show Answer Correct Answer: C) Current Liabilities. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Statement Analysis Quiz 1Financial Statement Analysis Quiz 2Financial Statement Analysis Quiz 3Financial Statement Analysis Quiz 4Financial Statement Analysis Quiz 5Financial Statement Analysis Quiz 6Financial Statement Analysis Quiz 7Financial Statement Analysis Quiz 8Financial Statement Analysis Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books