This quiz works best with JavaScript enabled. Home > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 15 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A business with operating expenses that exceed its benchmark should always begin by reducing the number of employees, the largest operating expense for most businesses. A) True. B) False. Show Answer Correct Answer: B) False. 2. Where the Trade Payables will be classified in the Balance Sheet? A) Current Liabilities. B) Term Liabilities. C) Net Worth. D) Non of the above. Show Answer Correct Answer: A) Current Liabilities. 3. In periods of inflation, accounting depreciation is ..... relative to replacement cost, and real economic income is ..... A) Overstated; overstated. B) Overstated; understated. C) Understated; overstated. D) Understated; understated. E) Correctly stated; correctly stated. Show Answer Correct Answer: C) Understated; overstated. 4. Operating margin is also referred to as A) Rate of return on sales. B) Operating income. C) Gross margin. D) Earnings per share. Show Answer Correct Answer: A) Rate of return on sales. 5. If Long Term Uses are more than the Long Term Sources, what will be resultant figure called? A) Long Term Surplus. B) Long Term Deficit. C) Working Capital Gap. D) Non of the above. Show Answer Correct Answer: B) Long Term Deficit. 6. Which of these is the largest planet in the Solar System? A) Earth. B) Mars. C) Mercury. D) Jupiter. E) Pluto. Show Answer Correct Answer: D) Jupiter. 7. In analyzing the financial statements of a client's business, you notice that the collection period for accounts receivable has been increasing. What does this increase suggest about the firm's credit policy? A) The firm's current ratio is also increasing. B) The collection period has no relationship to a firm's credit policy. C) The firm is losing qualified customers. D) The credit policy is too lenient. Show Answer Correct Answer: D) The credit policy is too lenient. 8. A unit is enjoying CC limit of Rs. 20 lakh and turnover for FY 2017-18 was 110 lakh. The unit has approached for enhancement of Rs. 10 lakh in CC limit with estimated turnover of Rs. 150 lakh for FY 2018-19. Whether the Audited Financial Statements are required? A) Yes, as the enhanced exposure will be more than Rs. 25 lakh. B) No, because the turnover is less than Rs. 200 lakh. C) Depends upon the relationship with the borrower. D) Not at all required. Show Answer Correct Answer: A) Yes, as the enhanced exposure will be more than Rs. 25 lakh. 9. Which is an example of tangible fixed Assets? A) Copyrights. B) Pre-paid expenses. C) Land & Building. D) Pre-operating expenses. Show Answer Correct Answer: C) Land & Building. 10. The ..... provides a financial summary of the firm's operating results during a specified period. A) Income statement. B) Balance sheet. C) Statement of cash flows. D) Statement of retained earnings. Show Answer Correct Answer: A) Income statement. 11. Which is not a component of an Audited Financial Report? A) Neraca. B) Income statement. C) Statement of Changes in Equity. D) Deed of General Meeting of Shareholders. Show Answer Correct Answer: D) Deed of General Meeting of Shareholders. 12. Which of the following parties would perform an internal financial analysis? A) A financial analyst forecasting the next period's borrowing needs. B) A firm's competitors. C) A firm's creditors. D) Analysts for investment companies. Show Answer Correct Answer: A) A financial analyst forecasting the next period's borrowing needs. 13. What does the current ratio measure? A) The extent to which current liabilities are covered by current assets. B) The firm's ability to pay off short-term obligations without relying on the sale of inventories. C) The firm's ability to meet its annual interest payments. D) The rate of return on common stockholders' investment. Show Answer Correct Answer: A) The extent to which current liabilities are covered by current assets. 14. Interest Coverage Ratio is to be calculated as? A) EBITDA / Interest. B) PAT / Interest. C) Cash Accruals / Interest. D) EBIDT / Interest. Show Answer Correct Answer: A) EBITDA / Interest. 15. Interest Coverage Ratio (ICR) is calculated by dividing EBIDTA from Interest expenses. What does 'A' represents in EBIDTA? A) Adjustments. B) Amortization. C) Accruals. D) Actual income. Show Answer Correct Answer: B) Amortization. 16. Who owns the retained earnings of a public firm? A) Inland Revenue Board Of Malaysia. B) Common stockholders. C) Bondholders. D) Preferred stockholders. Show Answer Correct Answer: B) Common stockholders. 17. Which analysis is considered as static A) Horizontal analysis. B) Vertical analysis. C) Internal analysis. D) External analysis. Show Answer Correct Answer: B) Vertical analysis. 18. The main source of revenue for a trading business A) Sales. B) Dividends. C) Fees received. D) Capital. Show Answer Correct Answer: A) Sales. 19. Profit on sale of investments is shown in which section of the Cash Flow Statement? A) Non-Operating Activities. B) Operating Activities. C) Investing Activities. D) Financing Activities. Show Answer Correct Answer: C) Investing Activities. 20. The ..... is useful in evaluating credit and collection policies. A) Average payment period. B) Current ratio. C) Average collection period. D) Current asset turnover. Show Answer Correct Answer: C) Average collection period. ← 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