This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Statement Analysis > Financial Statement Analysis – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Statement Analysis Quiz 11 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Identify the item which is not a part of shareholders' funds A) Share application money pending allotment. B) Share capital. C) Reserves and surplus. D) Money received against share warrants. Show Answer Correct Answer: A) Share application money pending allotment. 2. Balance sheet shows: A) Financial position of the company. B) Profit or loss of the company. C) Cash flow of the company. D) Assets, Liabilities and Profits. Show Answer Correct Answer: A) Financial position of the company. 3. What are the different types of ratios used in financial statement analysis? A) Liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios. B) Liquidity ratios, profitability ratios, efficiency ratios, and market ratios. C) Income ratios, expense ratios, debt ratios, and turnover ratios. D) Current ratios, quick ratios, leverage ratios, and activity ratios. Show Answer Correct Answer: A) Liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios. 4. Given entry falls under Non-Operating Income A) Sales. B) Dividend (Cr.). C) Dividend (Dr.). D) Goodwill Written Off. Show Answer Correct Answer: B) Dividend (Cr.). 5. The following is an example of a ratio A) Return on Asset. B) Return of The King. C) Return on Equilibrium. D) Return of the Jedi. Show Answer Correct Answer: A) Return on Asset. 6. Cost of goods sold divided by average inventory A) Cost of goods sold margin. B) Inventory margin. C) NOT IN THE CHOICES. D) Inventory turnover. E) Days sales in receivables. Show Answer Correct Answer: D) Inventory turnover. 7. The Net Worth (Capital and Reserves) of a company as on 31.03.2017 was Rs. 965 lakh. During FY 2017-18, the Company had issued bonus shares of Rs. 135 lakh, out of reserves. What will the impact on net worth of the Company as on 31.03.2018, assuming that there will be no fresh infusion of capital and no other increase in reserves during FY 17-18? A) Net Worth will increase by Rs. 135 lakh. B) Net Worth will decrease by Rs. 135 lakh. C) No impact. D) Cannot be assessed from the given information. Show Answer Correct Answer: C) No impact. 8. A Company has forgot to record the depreciation in the its books. What could be the effects on the earnings of the Company? A) Earnings will not be changes as the Depreciation is a non cash charge. B) Earnings are inflated. C) Earnings will be decreased. D) Depreciation is only an book entry for debiting P&L account and crediting fixed assets, therefore will not impact at all on earnings. Show Answer Correct Answer: B) Earnings are inflated. 9. A financial report that shows a company's cash coming in and out is called..... A) Balance sheet report. B) Income statement. C) Capital change report. D) Cash flow statement. Show Answer Correct Answer: D) Cash flow statement. 10. Financial analysis is significant because it: A) Ignores qualitative aspect. B) Judges financial position and operational efficiency. C) Suffers from the limitations of financial statement. D) Is affected by personal ability and bias of the analysis. Show Answer Correct Answer: B) Judges financial position and operational efficiency. 11. Capital intensity ratio A) NOT IN THE CHOICES. B) Net sales divided by total capital. C) Total assets divided by net sales. D) Total capital divided by total assets. E) Total assets divided by total liabilities. Show Answer Correct Answer: C) Total assets divided by net sales. 12. The gross profit margin gives investors the best indication of how effectively a business is earning a profit from its normal business operations. A) False. B) True. Show Answer Correct Answer: A) False. 13. Total Outside Liabilities are? A) Total Liabilities-Term Liabilities. B) Total of current and term liabilities. C) Total Liabilities-Current Liabilities. D) Total Assets-Current Liabilities. Show Answer Correct Answer: B) Total of current and term liabilities. 14. The ratio that shows the existence of protection for creditors against the possibility of liquidation is called..... A) Debt ratio. B) Solvability ratio. C) Quick ratio. D) Current ratio. Show Answer Correct Answer: C) Quick ratio. 15. Which of the following stakeholder care most about a company's current ratio? A) Its shareholders. B) Its customers . C) Its suppliers. D) Its competitors. Show Answer Correct Answer: C) Its suppliers. 16. An accounts receivable ratio above the target range may indicate that ThreeGreen is too liberal in extending credit to its customers A) True. B) False. Show Answer Correct Answer: A) True. 17. Which of the following companies is most likely to have the highest inventory turnover? A) British Airways, an airline . B) Whole Foods, a grocery chain. C) Books-A-Million, a bookstore chain. D) Subway, a fast food company. Show Answer Correct Answer: D) Subway, a fast food company. 18. What is the purpose of ratio analysis? A) To standardize numbers and facilitate comparisons. B) To highlight weaknesses and strengths. C) To make ratio comparisons through time and with competitors. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. Which of the basic financial statements is best used to answer questions about changes in owner's equity that are not explained by the income statement? A) Income statement. B) Balance sheet. C) Cash flow statement. D) Statement of shareholder's equity. Show Answer Correct Answer: D) Statement of shareholder's equity. 20. Which of the following is not a liquidity ratio? A) Quick ratio. B) Cash ratio. C) NOT IN THE CHOICES. D) Defensive interval ratio. E) Rate of return on equity. Show Answer Correct Answer: E) Rate of return on equity. 21. All of the following items are typical of a multiple-step income statement except for: A) Total costs and expenses. B) Gross profit. C) Net sales. D) Operating income. Show Answer Correct Answer: A) Total costs and expenses. 22. Competitive ratio is comparing ratio of the firm with the another firm within the same industry. A) False. B) True. Show Answer Correct Answer: B) True. 23. Form-II of CMA format is named as? A) Fund Flow Statement. B) Operating Statement. C) Analysis of Balance Sheet. D) Cash Flow Statement. Show Answer Correct Answer: B) Operating Statement. 24. What is a Financial Report? A) Wife's shopping report to husband. B) Reports used in banking transactions. C) Reports containing financial information about business entities. D) Reports containing debts and receivables of business entities only. Show Answer Correct Answer: C) Reports containing financial information about business entities. 25. The debt ratio is a measure of a firm's ..... A) Liquidity. B) Efficiency. C) Profitability. D) Leverage. Show Answer Correct Answer: D) Leverage. 26. Records of a company's financial information in an accounting period that can be used to describe the company's performance are called..... A) Management reports. B) Financial statements. C) Accountability Report. D) Audit report. Show Answer Correct Answer: B) Financial statements. 27. Which of the following financial statements should have the highest credibility? A) Pro Forma Financial Report. B) In-House Financial Reports. C) Audited Financial Reports. D) Management Financial Report. Show Answer Correct Answer: C) Audited Financial Reports. 28. What does the return on total assets (ROA) ratio measure? A) Operating income per dollar of sales. B) Net income to total assets. C) Net income per dollar of sales. D) Net income to common equity. Show Answer Correct Answer: B) Net income to total assets. 29. Net Working Capital (NWC) can be calculated as? A) Total Current Assets-Total Current Liabilities. B) Long Term Sources-Long Term uses. C) (Net Worth + Term Liabilities)-(Total Assets-current assets). D) Any of the above. Show Answer Correct Answer: D) Any of the above. 30. Limitation of financial analysis is A) Dressing. B) Window. C) Window Dressing. D) None. Show Answer Correct Answer: C) Window Dressing. ← PreviousNext →Related QuizzesAccounting QuizzesFinance 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 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books