This quiz works best with JavaScript enabled. Home > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 9 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The ..... of business firm is measured by its ability to satisfy its short term obligations as they become due: A) Activity. B) Liquidity. C) Profitability. D) Solvency. Show Answer Correct Answer: B) Liquidity. 2. Which statements are involve personal judgement in certain cases? A) Financial statements. B) Income statement. C) Profit and loss account statement. D) None of these. Show Answer Correct Answer: A) Financial statements. 3. Which of the following is not included in computing EBT (earnings before taxes)? A) Marketing expenses. B) Depreciation expense. C) Cost of goods sold. D) Dividends. Show Answer Correct Answer: D) Dividends. 4. The amount of profit generated by the firm in relation to the amount invested by the owners. A) Return on investment. B) Ratio. C) Working capital. D) Inventory turnover. Show Answer Correct Answer: A) Return on investment. 5. According to CIMB Niaga KAP SOP, which tier of KAPs does it allow for L/K audit results without needing bank statement analysis? A) Tier 1. B) Tier 2. C) Tier 3. D) Tier 4. Show Answer Correct Answer: A) Tier 1. 6. Financial statements are prepared for the use of? A) Management of the business concern. B) Government Authorities. C) Shareholders. D) All of the above. Show Answer Correct Answer: D) All of the above. 7. Alpha Company's benchmark total operating expense ratio is between 32.0% and 34.0%. An increase in its operating expense ratio from 33.1% to 34.2% is a favorable trend. A) True. B) False. Show Answer Correct Answer: B) False. 8. Labor unions use the financial reports to help determine their demands when they negotiate for employees A) True. B) False. Show Answer Correct Answer: A) True. 9. What does the inventory 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: A) How many times inventory is turned over during the year. 10. If the Total of Current Assets is Rs. 168 lakh and Total Current Liabilities is Rs. 142.68 lakh, then what will the amount of long term funds, which are supporting the financing of current assets? A) Rs. 26.32 lakh. B) Rs. 25.32 lakh. C) Rs. 24.32 lakh. D) Can't be calculated from the given information. Show Answer Correct Answer: B) Rs. 25.32 lakh. 11. State any two items that are included in the following major head under which liabilities of a company are shown:(i) Short term Borrowings. A) Loans repayable on demand. B) Unpaid dividends. Show Answer Correct Answer: A) Loans repayable on demand. 12. What will be the EBIDTA if, Depreciation is Rs. 12.50 lakh, Profit Before Tax is Rs. 36.40 lakh, Interest cost is Rs. 16.55 lakh and tax expense is Rs. 10.92 lakh? A) Rs. 65.45 lakh. B) Rs. 54.53 lakh. C) Rs. 65.55 Lakh. D) Rs. 54.43 Lakh. Show Answer Correct Answer: A) Rs. 65.45 lakh. 13. What will be the cash accrual of the a unit if, Sales is Rs. 135 lakh, Loss is Rs. 0.10 lakh and Depreciation is Rs. 8 lakh. The unit has paid an interest of Rs. 4 lakh on term loan.? A) Rs. 2 lakh. B) Rs. 18 lakh. C) (-) Rs. 2 lakh. D) Rs. 14 lakh. Show Answer Correct Answer: C) (-) Rs. 2 lakh. 14. Identify the major heads under which the following items will be shown in the Balance Sheet of a company as per Schedule III of Companies Act, 2013:(i) Provision for Tax.(ii) Loan payable on demand. A) Non Current Liabilities. B) Current Liabilities. Show Answer Correct Answer: B) Current Liabilities. 15. What does the profit margin ratio measure? A) Operating income per dollar of sales. B) Net income per dollar of sales. C) Net income to total assets. D) Net income to common equity. Show Answer Correct Answer: B) Net income per dollar of sales. 16. In the long run, it is most important for a business to generate an inflow of cash from its: A) Operating activities. B) Investing activities. C) Stockholders. D) Creditors. Show Answer Correct Answer: A) Operating activities. 17. If you were given the components of current assets and of current liabilities, what ratio(s) could you compute? A) Quick ratio or Acid test ratio. B) Average collection period. C) Current ratio. D) Both A and C. E) All of the above. Show Answer Correct Answer: D) Both A and C. 18. Choose the appropriate ratio analysis:Accounts receivable turnover A) Liquidity ratios. B) Profitability ratios. C) Solvency Ratios. D) Financial Ratios. Show Answer Correct Answer: A) Liquidity ratios. 19. Total Fund Utilised = Fixed Assets + Investment +? A) Loan Fund. B) Working Capital. C) Current Assets. D) Current Liabilities. Show Answer Correct Answer: B) Working Capital. 20. Which of the following generally is the most useful in analyzing companies of different sizes? A) Comparative statements. B) Common-sized financial statements. C) Price-level accounting. D) Profitability index. Show Answer Correct Answer: B) Common-sized financial statements. ← 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 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books