Top 50+ Solved Introduction to Analysis and Interpretation of Financial Statements MCQ Questions Answer
Q. The term financial statement refers to…
a. income statement
b. cash flow and fund flow
c. balance sheet
d. all
Q. Which of the following is the main objective of a financial statement?
a. to know the solvency
b. to know the debt capacity
c. to know the earning capacity
d. all
Q. In financial statements, the fixed assets are shown at …
a. market price
b. cost price
c. replacement price
d. none
Q. What is followed while preparing the financial statements?
a. accounting conventions
b. accounting principles
c. accounting concepts
d. all
Q. In financial statement the stock is valued at cost or market price whichever is less on the basis of…
a. accounting concepts
b. accounting conventions
c. accounting principles
d. none
Q. The balance sheet shows …
a. the source of working capital
b. the change in working capital
c. both
d. none
Q. The analysis and interpretations of the financial statement will reveal …
a. the financial position
b. the profitability
c. none
d. both
Q. The process of explaining the meaning, significance and relationship between two financial factors iscalled …
a. summarization
b. analysis
c. interpretation
d. none
Q. ________is a simply the amount of cash coming in to a business.
a. cash flow
b. inflow
c. both a and b
d. none of the above.
Q. If value of opening inventories increases, what happens to the value of gross profit?
a. decreases
b. increases
c. stays the same
d. gets closer to net profit
Q. Incorrect cash flow planning can lead to ________
a. solvency
b. insolvency
c. bankruptcy
d. failure
Q. Analysis of any financial Statement comprises
a. balance sheet
b. p&l account
c. trading account
d. all of the above
Q. Which of the following are techniques, tools or methods of analysis and interpretation of financialstatements?
a. ratio analysis
b. average analysis
c. trend analysis
d. all of the above
Q. Interpretation of accounts is the
a. art and science of translating the figures
b. to know financial strengths and weaknesses of a business
c. to know the causes for the prevailing performance of business
d. all of the above
Q. The major device for measuring the profitability of a firm over a defined period of time is the
a. income statement.
b. balance sheet.
c. statement of cash flow.
d. none of the above.