This quiz works best with JavaScript enabled. Home > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The corporate governance mechanism is a mechanism for monitoring and implementing all activities and policies within the company. Indonesia itself uses a two-tier corporate governance system which is characterized by A) There is a Board of Directors and a Board of Commissioners. B) There is a Board of Directors and an Audit Committee. C) The existence of an Independent Board of Commissioners. D) The existence of an Audit Committee. Show Answer Correct Answer: A) There is a Board of Directors and a Board of Commissioners. 2. Loan which is taken without any mortgage of asset is known as? A) Secured Loan. B) Unsecured Loan. Show Answer Correct Answer: B) Unsecured Loan. 3. Transfer to General Reserve will be recorded under ..... A) Non-Operating Expenses. B) Appropriations. C) Profit & Loss A/C b/d. D) None of above. Show Answer Correct Answer: B) Appropriations. 4. Non-current liabilities are business obligations that are due within one year of a company's normal operating cycle. A) True. B) False. Show Answer Correct Answer: B) False. 5. ..... is a report of the cash flow generated by the firm's operations, investments, and financial activities. 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: C) The statement of cash flows. 6. Adjusted Tangible Net Worth (TNW) represents the real / actual Promoters' Contribution. How Adjusted TNW is calculated? A) Net Worth-Investment in associates / subsidiaries / JVs etc. B) Net Worth-Intangibles. C) Net Worth-Revaluation Reserve-Intangibles-Investment in associates / subsidiaries / JVs etc. D) Net Worth-Non Current Assets. Show Answer Correct Answer: C) Net Worth-Revaluation Reserve-Intangibles-Investment in associates / subsidiaries / JVs etc. 7. Current assets include only those assets which are expected to be realized within ..... A) 3 months. B) 6 months. C) 1 year. D) 2 years. Show Answer Correct Answer: C) 1 year. 8. The following includes an audit opinion A) Legal Opinion. B) Second Opinion. C) Unqualified Opinion. D) Testified Opinion. Show Answer Correct Answer: C) Unqualified Opinion. 9. If net sales are P1, 500, 000 and accounts receivable amount to P300, 000, how long is the average collection period? A) 36.00 days. B) 45.00 days. C) 64.00 days. D) 72.00 days. E) NOT IN THE CHOICES. Show Answer Correct Answer: D) 72.00 days. 10. Explain the concept of the gross profit margin and its relevance in financial statement analysis. A) The gross profit margin is a measure of a company's total revenue. B) The gross profit margin is irrelevant in financial statement analysis. C) The gross profit margin only reflects a company's marketing strategy. D) The gross profit margin is a financial metric that measures a company's efficiency in generating profit from its revenue. It is relevant in financial statement analysis as it provides insight into a company's pricing strategy, production efficiency, and overall financial health. Show Answer Correct Answer: D) The gross profit margin is a financial metric that measures a company's efficiency in generating profit from its revenue. It is relevant in financial statement analysis as it provides insight into a company's pricing strategy, production efficiency, and overall financial health. 11. Annual report is issued by a company to its: A) Directors. B) Auditors. C) Shareholders. D) Managers. Show Answer Correct Answer: C) Shareholders. 12. A Company has changed the method of applying Depreciation from WDV to SLM. What will the impact on the profit for the particular year in which, change happened? A) No impact. B) Profit will either increase or decrease, depend upon the case to case basis. C) Profit will decrease for the particular year in which, change happened. D) Profit will increase for the particular year in which, change happened. Show Answer Correct Answer: D) Profit will increase for the particular year in which, change happened. 13. Silver Clothing Store had a balance in the Accounts Receivable account of P920, 000 at the beginning of the year and a balance of P980, 000 at the end of the year. Net credit sales during the year amounted to P9, 500, 000. The average collection period of the receivables in terms of days was? A) 37.6 days. B) 36.5 days. C) 35.4 days. D) 34.8 days. Show Answer Correct Answer: B) 36.5 days. 14. Honest and Company has the following credit balances in its books at the end of FY. What are the total long term liabilities? (i) Trade Payables Rs. 130 (ii) Deferred Tax Rs. 40 (iii) Term Loan Rs. 240 (Due in 4 equal installments) (iv) Share Premium Rs. 80 (v) Long Term Provision for Pension Payment Rs. 210. A) Rs. 430. B) Rs. 490. C) Rs. 450. D) Rs. 510. Show Answer Correct Answer: A) Rs. 430. 15. The comparison of a firm's current assets to current liabilities. The ratio indicates the amount of current assets available to pay off $ 1 of current debt. A) Acid test/ quick ratio. B) Asset turnover ratio. C) Current ratio. D) Inventory turnover. Show Answer Correct Answer: C) Current ratio. 16. The difference between current assets and current liabilities at a point in time. The amount of money that would be left over if all the current liabilities were paid off by current assets. A) Current ratio. B) Working capital. C) Acid test/ quick ratio. D) Asset turnover ratio. Show Answer Correct Answer: B) Working capital. 17. The percentage analysis of increases and decreases in individual items in comparative financial statements is called: A) Vertical analysis. B) Solvency analysis. C) Profitability analysis. D) Horizontal analysis. Show Answer Correct Answer: D) Horizontal analysis. 18. Advance given for procurement of Machine should be classified as? A) Non-Current Assets. B) Current Assets. C) Intangibles. D) Fixed Assets. Show Answer Correct Answer: A) Non-Current Assets. 19. What does the quick 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: B) The firm's ability to pay off short-term obligations without relying on the sale of inventories. 20. Inventory turnover A) Short-term Solvency and Liquidity. B) Asset Liquidity and Management Efficiency. C) Long-term Financial Position or Stability. D) Profitability and Returns to Investors. E) NOT IN THE CHOICES. Show Answer Correct Answer: B) Asset Liquidity and Management Efficiency. ← 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 9Financial Statement Analysis Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books