This quiz works best with JavaScript enabled. Home > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 13 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 13 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is another name for the debtor's turnover ratio? A) Debt to assets ratio. B) Debt to equity ratio. C) Accounts receivables turnover ratio. D) Acid-test ratio. Show Answer Correct Answer: C) Accounts receivables turnover ratio. 2. Which of the following is not shown as non-current liabilities A) Trade payables. B) Long-term borrowings. C) Deferred tax liabilities. D) Long-term provisions. Show Answer Correct Answer: A) Trade payables. 3. Which of the following organizations is least likely involved with enforcing compliance with financial reporting standards?. A) Financial Conduct Authority. B) SecCurities and Exchange Commission. C) International Accounting Standards Board?. D) None of above. Show Answer Correct Answer: A) Financial Conduct Authority. 4. What is ratio analysis? A) Ratio analysis is a method of analyzing and interpreting non-financial data to evaluate a company's performance. B) Ratio analysis is a method of analyzing and interpreting financial statements to evaluate a company's marketing strategies. C) Ratio analysis is a method of analyzing and interpreting financial statements to evaluate a company's stock price. D) Ratio analysis is a method of analyzing and interpreting financial statements to evaluate a company's performance and financial health. Show Answer Correct Answer: D) Ratio analysis is a method of analyzing and interpreting financial statements to evaluate a company's performance and financial health. 5. Below are all the components of financial statements except: A) Statement of comprehensive income. B) Statement of financial position. C) Statement of debt. D) Statement of cash flow. Show Answer Correct Answer: C) Statement of debt. 6. In the Cash Flow Statement, net cash flow from the Operating Activities is negative. What could be the possible reasons for the same? A) The unit is growing very fast and its current assets requirement is increasing at a very high pace. B) Holding level of inventories has increased substantially. C) Abnormal delays are there in realisation of trade receivables. D) All the above. Show Answer Correct Answer: D) All the above. 7. If inventory were determined in one period on one basis and in the next period on a different basis, the resulting inventory and profits would not be comparable from period to period A) True. B) False. Show Answer Correct Answer: A) True. 8. Who will not be considered as Related Party for a Company? A) Lenders / Financers. B) Buyers or Suppliers. C) Government Departments. D) All above are not considered as Related Party. Show Answer Correct Answer: D) All above are not considered as Related Party. 9. Market value ratios indicate A) Whether the firm is using its asset productively. B) Whether the firm is liquid. C) Whether the firm is profitable. D) How highly the firm is valued by investors . Show Answer Correct Answer: D) How highly the firm is valued by investors . 10. Working Capital formula? A) Current assets-current liabilities. B) Current assets-non current liabilities. C) Stock +prepaid expense. D) None of above. Show Answer Correct Answer: A) Current assets-current liabilities. 11. A Company's liquid assets are Rs.5, 00, 000 and its current liabilities are Rs.3, 00, 000. Thereafter, it paid Rs.1, 00, 000 to its trade payables. Quick ratio will be: A) 1.33:1. B) 2.5:1. C) 1.67:1. D) 2:1. Show Answer Correct Answer: D) 2:1. 12. A company having earnings per share of $ 5.67 is more profitable than a ocmpany having earnings per share of $ 4.32 A) True. B) False. Show Answer Correct Answer: B) False. 13. If current liabilities are P100, 000 and current assets are P200, 000, what is the current ratio? A) 0.50. B) 1.20. C) 1.50. D) 2.00. E) NOT IN THE CHOICES. Show Answer Correct Answer: D) 2.00. 14. ..... is a summary of the profitability of the firm over a period of time, such as a year. A) The balance sheet. B) The income statement. C) The statement of cash flows. D) All of the options are correct. E) None of the options are correct. Show Answer Correct Answer: B) The income statement. 15. Return on total assets is the product of A) Interest rates and pre-tax profits. B) The debt-equity ratio and P/E ratio. C) The after-tax profit margin and the asset turnover ratio. D) Sales and fixed assets. E) None of the options are correct. Show Answer Correct Answer: C) The after-tax profit margin and the asset turnover ratio. 16. What is the difference between Current Tax and Deferred Tax? A) Current tax is the amount which is payable as per IT Act whereas deferred tax is the amount which arises due to timing difference and payable / recoverable in future. B) No difference, only a way of presentation of tax amount. C) Current tax is for current year and deferred tax is for income, estimated for future period. D) Current tax is payable by the unit whereas deferred tax is the amount, which the unit is not suppose to pay at all. Show Answer Correct Answer: A) Current tax is the amount which is payable as per IT Act whereas deferred tax is the amount which arises due to timing difference and payable / recoverable in future. 17. Candy Corporation had pretax profits of RM1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of RM50, 000. There were 100, 000 shares outstanding and no interest expense. What were Candy Corporation's earnings per share? A) RM3.91. B) RM4.52. C) RM7.42. D) RM7.59. Show Answer Correct Answer: C) RM7.42. 18. The ratio that gives the best indication of how effectively a business is earning a profit from its normal business operations is the A) Debt ratio. B) Quick ratio. C) Gross margin. D) Operating margin. Show Answer Correct Answer: D) Operating margin. 19. A firm, engaged in the manufacturing of Plastic Bottles, invested Rs. 35 lakh during FY 2015-16 in one of its associate concern. During FY 2017-18, the firm has received an income of Rs. 2.86 lakh from these investments. What should be the treatment of this income while preparing / validating the operating statement of the firm? A) The income generated from investment should be considered as Non-Operating Income. B) The income generated from investment should be considered as Operating Income. C) It should not be considered at all as it is not related to the core activity of the firm. D) It is already considered in the revenue generated by the firm, therefore no separate treatment is required. Show Answer Correct Answer: A) The income generated from investment should be considered as Non-Operating Income. 20. The set of ratios that is most useful in evaluating solvency is A) Debt ratio, current ratio, and times interest earned. B) Debt ratio, times interest earned, and return on assets. C) Debt ratio, times interest earned, and quick ratio. D) Debt ratio, times interest earned, and cash flow to debt. Show Answer Correct Answer: D) Debt ratio, times interest earned, and cash flow to debt. ← 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