Financial Statements and Financial Statements Analysis MCQs [AHSEC Class 12 MCQs Multiple Choice Questions and Answers]

 Financial Statements and Financial Statements Analysis MCQs 
[AHSEC Class 12 MCQs Multiple Choice Questions and Answers]

 Financial Statements of Companies

A. State whether the following statements are true or false.

1)      Financial statements are the end products of accounting process.       TRUE

2)      Financial statements are primarily directed towards the need of owners.  TRUE

3)      Facts & figures presented in financial statements may be affected by may be personal bias.  FALSE    

4)      Recorded facts are based on replacement cost.                          FALSE

5)      Going concerns concept assumes that the enterprise continues for a long period of time.        TRUE

6)      Financial statements provide a summary of accounts.                              FALSE

7)      Financial statements are based on recorded facts.                     TRUE

8)      Patent is an intangible asset.               TRUE

9)      Financial Statements are prepared on historical cost.                               TRUE

10)   Balance Sheet is a statement containing all the ledger balances contained in the ledger.          FALSE

B. Fill up the blanks with appropriate word/words.

1)      Financial Statements are the basic source of information to interested parties.

2)      Balance Sheet shows the financial position of an enterprise.

3)      Financial Statements are prepared on the basis of Historical value.

4)      A company is required to publish its Financial Statements every year.              2020

5)      Profit & Loss Statement shows the Operating Efficiency of the enterprise.

6)      Balance sheet shows financial Position of an enterprise.

7)      Financial Statements are Basis of information to interested parties.

8)      Preparation of Profit & Loss Statement is based on Accrual basis.

9)      Shareholders of a company are called Owners.

Also Read: CHAPTERWISE MCQs (MULTIPLE CHOICE QUESTIONS AND ANSWERS)

C. Choose the correct alternative each carrying 1 mark:

1.       Financial statements are Summarized report of recorded facts. 2017, 2018, 2020

2.       Financial statements include Profit & Loss statement, Balance Sheet and Cash Flow Statement.  2017

3.       Financial Facts are recorded at Cost Price.

4.       Which section of the Companies Act requires that Balance Sheet is to be prepared in the prescribed form: Sec 129.

5.       The prescribed form of the Balance Sheet for the Companies has been in the Schedule III.

6.       Proposed Dividend is shown in the Balance Sheet of a Company under Current liabilities & sub heading Short term provisions.

7.       Current liabilities are payable within 12 months.

8.       Number of main headings in Equity & Liabilities side of a Company Balance Sheet is 4.

9.       The number of main headings in the asset side of the balance sheet is 2.

10.   Preliminary Expenses are shown in the Balance Sheet under Other non-current assets.

ANALYSIS OF FINANCIAL STATEMENTS

A. State whether the following statements are true or false.

1)      The term financial statement analysis includes only analysis and does not include interpretations. FALSE

2)      The term “Interpretation” means explaining the meaning & significance of data.   TRUE                    

3)      The term “Analysis” means simplification of financial data by proper clarification of the data.                TRUE

4)      Comparative Statements are the form of Horizontal Analysis.                               TRUE

5)      Common size statements are a tool in vertical analysis.                                           TRUE

6)      In common size statement, every item is expresses as a percentage of some common base.   TRUE

7)      Trend Analysis determines the direction upwards or downward.                         TRUE

8)      Financial analysis provides an insight into the structure of financial statements.

9)      Financial analysis is used only by the creditors.           FALSE    2017

 B. Choose the correct alternatives:

1.       Most commonly used tools for financial analysis are a)       Horizontal Analysis. b)      Vertical Analysis. c)       Ratio Analysis. d)      All of the above. 2.       Balance Sheet shows a)      Financial position of a Company. b)      Profit or Loss of a Company. c)       Cash flow of a Company. d)      None of the above. 3.       Financial statements of a company include 2019 a)       Balance Sheet. b)      Profit or Loss Account. c)       Cash Flow Statements. d)      All of the above.

4.       Annual Report is issued by a company to its: 2019 a)       Directors. b)      Auditors. c)       Shareholders. d)      Management. 5.        A Balance Sheet provides information about the financial position of the enterprise a)      At a point of time. b)      Over a period of time. c)       For a period of time. d)      None of the above.