Top 50+ Solved Introduction to Analysis and Interpretation of Financial Statements MCQ Questions Answer
Q. The ________ does not represent continuing operations in any way, but is simply a snapshot of the totalworth of a firm at a given point in time.
a. income statement
b. balance sheet
c. sources and uses of funds statement
d. none of the above
Q. Cash inflows arise from _____ assets, ________ liabilities, and ___________ stockholders' equity.
a. increasing; increasing; decreasing
b. increasing; decreasing; decreasing
c. decreasing; increasing; increasing
d. decreasing; increasing; decreasing
Q. Which of the following is NOT a key ratio in the prediction of bankruptcy as developed by EdwardAltman?
a. debt to equity
b. current ratio
c. retained earnings as a percent of total assets
d. total assets
Q. __________ analysis is the process of studying a series of ratios for a company and/or industry overtime.
a. dupont
b. trend
c. common size
d. all of the above.
Q. The statement of cash flows tells us
a. accounting profit or loss
b. how cash was created
c. actual profit or loss
d. two of the above
Q. The primary sections of a statement of cash flows are:
a. cash flows from investing, operating, and financing activities.
b. cash flows from investing and operating activities plus investments.
c. cash flows from investing, financing, and accounting activities.
d. cash flows from investing, operating, financing, and accounting activities.
Q. Which of the following are Non-current assets?
a. land, building and plant
b. leasehold property
c. computer software
d. all of the above
Q. Funds flow statements are prepared so as to
a. to identify the changes in working capital
b. to identify reasons behind change in working capital
c. to know the item-wise outflow of funds during given period
d. all of the above
Q. Financial statements are ____________.
a. anticipated facts
b. recorded facts
c. estimated of facts
d. unknown facts
Q. Trend analysis is significant for ____________.
a. forecasting and budgeting
b. profit planning
c. capital rationing
d. working capital management
Q. In common size income statement analysis, which is taken as 100 percent?
a. sales
b. cost of goods sold
c. purchases
d. total assets
Q. Comparative statement analysis sheet is __________.
a. vertical analysis
b. horizontal analysis
c. either vertical or horizontal analysis
d. neither vertical nor horizontal analysis
Q. Financial statements are meaningful and useful only when they are ___________.
a. verified
b. presented to owners
c. analyzed and interpreted
d. published
Q. Vertical analysis is made on the basis of __________.
a. single set of financial statements
b. multiple sets of financial statements
c. different schedules attached to financial statements
d. similar set of financial statements
Q. Horizontal analysis is done by analyzing ____________.
a. quarterly statement
b. half yearly statement
c. financial statements of several years
d. financial statements of a particular year