This quiz works best with JavaScript enabled. Home > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Your firm has the following income statement items:Sales of RM50, 250Cost of goods sold of RM35, 025Operating expenses of RM10, 115Interest expense of RM750; andIncome tax of RM1, 744What is the amount of the firm's EBIT? A) RM15, 552. B) RM58, 000. C) RM5, 110. D) RM4, 630. Show Answer Correct Answer: C) RM5, 110. 2. A situation that indicates the existence of protection for creditors against possible liquidation is..... A) Low debt ratio. B) High debt ratio. C) Debt ratio = 0. D) Debt ratio > profit margin. Show Answer Correct Answer: A) Low debt ratio. 3. Comparative statement show the changes in A) Percentages. B) Absolute amounts. C) Both (a) and (b). D) Ratios. Show Answer Correct Answer: C) Both (a) and (b). 4. Businesses are generally involved in three different kinds of activities, and one of them is financing activities. What does the activity relate to? A) Relate to a company's main business:selling products or services to earn net income. B) Relate to the need for investing in property, plant, and equipment or expanding by making investments in other companies. C) Largest expense item, which reports the wholesale costs of inventory sold during the accounting period. D) Relate to how a company finances its assets with debt or stockholders' equity. E) Relate to the operating activities of a company. Show Answer Correct Answer: D) Relate to how a company finances its assets with debt or stockholders' equity. 5. Deferred Tax Assets are to be classified as? A) Fixed Assets. B) Non Current Assets. C) Current Assets. D) Intangible Assets. Show Answer Correct Answer: D) Intangible Assets. 6. What is the formula for calculating the current ratio? A) Current Ratio = Net Income / Total Liabilities. B) Current Ratio = Fixed Assets / Current Liabilities. C) Current Ratio = Current Assets / Current Liabilities. D) Current Ratio = Total Assets / Total Liabilities. Show Answer Correct Answer: C) Current Ratio = Current Assets / Current Liabilities. 7. Whether Fund Flow Statement is part of Financial Statements? A) No. B) Yes. C) May be. D) Many not be. Show Answer Correct Answer: B) Yes. 8. A corporation should compare its working capital to industry standards. A) True. B) False. Show Answer Correct Answer: B) False. 9. Which of the following is not a measure of short-term liquidity? A) Quick ratio. B) Current ratio. C) Working capital. D) Debt ratio. Show Answer Correct Answer: D) Debt ratio. 10. Kimchi Corporation had beginning inventory P100, 000, cost of goods sold P750, 000, and ending inventory P150, 000. What was Kimchi's inventory turnover? A) 3 times. B) 6.0 times. C) 7.5 times. D) 5 times. Show Answer Correct Answer: B) 6.0 times. 11. Intangible assets are physical property, plant and equipment that the hospitality company has legal ownership of as result of a past business transaction. A) True. B) False. Show Answer Correct Answer: B) False. 12. Analysis carried out by changing the numbers in the balance sheet and income statement into percentages based on certain numbers is called..... A) Index analysis. B) Environmental impact analysis. C) Analisis common size. D) Financial ratio analysis. Show Answer Correct Answer: C) Analisis common size. 13. The quick ratio is 1.8:1, the current ratio is 2.7:1 and current liabilities are Rs 60, 000. Determine the value of the stock. A) Rs 54, 000. B) Rs 60, 000. C) Rs 1, 62, 000. D) None of the above. Show Answer Correct Answer: A) Rs 54, 000. 14. In the beginning of the financial year, ABS and Associates has acquired a machine at a cost of Rs. 12 lakh. By applying the rate @ 20% under WDV method for charging depreciation, what will the amount of depreciation to be debited to P&L account for the second year? A) Rs. 2.40 lakh. B) Rs. 1.92 lakh. C) Rs. 1.82 lakh. D) Rs. 1.86 lakh. Show Answer Correct Answer: B) Rs. 1.92 lakh. 15. Natalie reported assets of $ 12, 000 and equity of $ 7, 200. What is Natalie's debt ratio? A) 60%. B) 40%. C) 63%. D) Not enough information is provided. Show Answer Correct Answer: B) 40%. 16. Indicates a firm's ability to quickly liquidate assets to pay off current debts. A) Asset turnover ratio. B) Inventory turnover. C) Debt-to-assets ratio. D) Acid test/ quick ratio. Show Answer Correct Answer: D) Acid test/ quick ratio. 17. All of the following statements regarding the purpose of the Statement of Financial Position are correct except for? A) Shows assets, liabilities and owner's equity. B) It is prepared at a point in time. C) It can assist users, such as bank managers, with decisions. D) Shows revenue, expenses and profit. Show Answer Correct Answer: D) Shows revenue, expenses and profit. 18. Your firm has the following income statement items:Sales of RM50, 250Cost of goods sold of RM35, 025Operating expenses of RM8, 750Interest expense of RM750; and Income tax of RM1, 744What is the amount of the firm's net income? A) RM26, 616. B) RM4, 731. C) RM2, 616. D) RM7, 775. Show Answer Correct Answer: C) RM2, 616. 19. What is not true about the Reserves? A) Reserves are generally generated out of profits. B) Share Premium is not part of Reserves. C) Reserves are part of Net Worth. D) Share Premium is part of Reserves. Show Answer Correct Answer: B) Share Premium is not part of Reserves. 20. The primary goal of the financial manager is A) Minimizing risk. B) Maximizing profit. C) Maximizing wealth. D) Minimizing return. Show Answer Correct Answer: C) Maximizing wealth. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Statement Analysis Quiz 1Financial Statement Analysis Quiz 2Financial Statement Analysis Quiz 3Financial Statement Analysis Quiz 4Financial Statement Analysis Quiz 6Financial Statement Analysis Quiz 7Financial Statement Analysis Quiz 8Financial Statement Analysis Quiz 9Financial Statement Analysis Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books