Accounting for Managerial Decisions MCQs : This section focuses on the "Accounting for Managerial Decisions". These Multiple Choice Questions (MCQs) should be practiced to improve the Accounting for Managerial Decisions skills required for various interviews (campus interview, walk-in interview, company interview), placement, entrance exam and other competitive examinations.
Question 1
____________ centre is one for which both revenue and cost are accumulated
A. Cost centre
B. Revenue centre
C. Service centre
D. Profit centre
Question 2
_______________ establishes the relationship of different individual items which same common items
A. Common size statements
B. Comparative statements
C. Trend analysis
D. Comparative Income Statement
Question 3
____________ gives a diagnosis of the profitability and financial position
A. Analysis of financial statements
B. Preparation of financial statements
C. Construction of statements
D. None of the above
Question 4
________________________ helps in drawing inferences of conclusions
A. Analysis
B. Interpretation
C. Comparison
D. None of the above
Question 5
___________ helps to disclose financial position
A. Trial Balance
B. Profit and Loss Account
C. Balance sheet
D. Income Statement
Question 6
_________ is a system where persons are made responsible for control of cost
A. Cost accounting
B. Financial accounting
C. Responsibility accounting
D. None of these
Question 7
_______________ ratio studies the firm’s ability to meet its long term financial position
A. Liquidity ratio
B. Profitability
C. Activity
D. Leverage
Question 8
20,000 equity shares of Rs.10 each issued at 10% premium , cash is Rs__________________
A. Rs.2,00,000
B. Rs.2,10,000
C. Rs.2,15,000
D. Rs.2,20,000
Question 9
A centre at which proper utilization of asset used in the centre
A. Investment centre
B. Profit centre
C. Cost centre
D. Responsibility centre
Question 10
A control system where accountability is established with responsibility is known as ______________
A. Cost accounting
B. Responsibility accounting
C. Financial accounting
D. None of the above
Question 11
A firm’s investment in current asset is known as _______________
A. Net working capital
B. Gross working capital
C. Average working capital
D. None of these
Question 12
A segment of activity for which both revenue and cost are accumulated
A. Investment centre
B. Project centre
C. Cost centre
D. Responsibility centre
Question 13
A segment of activity for which cost is accumulated
A. Service centre
B. Cost centre
C. Profit centre
D. Investment centre
Question 14
A segment of activity for which revenues are accumulated
A. investment centre
B. profit centre
C. revenue centre
D. Responsibility
Question 15
A segment of activity or area of operation for which cost is collected is known as _________________
A. Cost centre
B. Profit centre
C. Investment centre
D. Responsibility centre
Question 16
A segment of activity or area of operation for which revenues are accumulated is known as ______
A. Cost centre
B. Profit centre
C. Revenue centre
D. Investment centre
Question 17
A statement depicting the reasons for the change in cash position from one period to another
A. Fund flow statement
B. Statement of uses and application of funds
C. Cash flow statement
D. Ratio analysis
Question 18
A statement prepared in the form of report
A. Fund flow
B. Cash flow
C. Ratio
D. Balance sheet
Question 19
A system of control where persons are made responsible for control of cost
A. Cost control
B. Production control
C. Responsibility accounting
D. Budgeting
Question 20
A system where accounting is established with responsibility
A. Responsibility accounting
B. Financial accounting
C. Cost accounting
D. Budgeting
Question 21
A transaction that doesn’t make any change in working capital position is _________
A. Inflow of fund
B. Out flow of fund
C. Non fund transaction
D. Fund transaction
Question 22
_________account is prepared to know funds from operation
A. Profit & Loss appropriation account
B. Profit and loss account
C. Trading account
D. Profit & Loss adjustment account
Question 23
Afford full diagnosis of the profitability and financial position
A. Preparation of Profit and Loss Account
B. Balance Sheet
C. Final Accounts
D. Analysis of financial statements
Question 24
An appropriation of profit is _____________________
A. Current asset
B. Non current asset
C. Provision for taxation
D. Non current liability
Question 25
An essential tool of short term financial analysis
A. Fund flow statement
B. Statement of uses and application of funds
C. Cash flow statement
D. Ratio analysis
Question 26
An example of Balance Sheet ratio is _______________
A. Net profit ratio
B. Inventory turn over ratio
C. Current ratio
D. Fixed asset turn over ratio
Question 27
Any gain on sale of non-current asset should be _____ from the net profit for determining fundsfrom operation
A. Deducted
B. Added
C. Increased
D. None of these
Question 28
AS-3 is related to
A. Cash flow statement
B. Funds flow statement
C. Balance sheet
D. Income statements
Question 29
Asset sold on credit is___ of funds
A. Application
B. Uses
C. Source
D. Decrease
Question 30
By computing current ratio _______________ solvency of a concern is assessed
A. Short term
B. Long term
C. Liquidity
D. Profitability
Question 31
Buy back of shares is shown under_______________________
A. operating activities
B. investing activities
C. financing activities
D. none of these
Question 32
Cash equivalent are usually of short term but highly _________________investments
A. liquid
B. Fixed
C. Changed
D. None of these
Question 33
Cash flow from financing activities include payment of interest on borrowing and___ to shareholders
A. Dividend
B. Interest
C. Bonus
D. Bonus shares
Question 34
Cash flow is a part of
A. Fund flow
B. Balance sheet
C. Income statement
D. Comparative statement
Question 35
Cash payment suppliers of goods and services are shown under____________.
A. Operating
B. Financing
C. Investing
D. None of the above
Question 36
Cash flow statement is based on_________
A. Cash basis of accounting
B. Accounting equation
C. Accrual basis of accounting
D. None of these
Question 37
Cash flow statement is based on past records, so it is_________in nature
A. historical
B. future item
C. past
D. none of these
Question 38
Cash receipts from royalties is an example of cash flow from__________
A. Investing activities
B. Financing activities
C. Operating activities
D. None of these
Question 39
Cash flow statement is prepared by taking the ____________ balance of cash
A. Opening balance
B. Closing balance
C. Monthly balance
D. Others
Question 40
Cash flow statement shows the causes for changes in__________
A. Cash balance
B. Fund
C. Working capital
D. None of these
Question 41
Cash flow statements (based on AS-3) should be prepared and presented under__________________method.
A. Direct
B. Indirect
C. Permanence
D. None of these
Question 42
Cash flows include
A. Cash payments only
B. Cash receipts only
C. Cash receipts and payments
D. Cash and noncash incomes and expenses.
Question 43
Cash from operations is equal to__________________
A. net profit afer tax
B. net profit plus increase in current asset
C. net profit plus decrease in current liabilities
D. net profit plus non-cash expenses plus decrease in current assets.
Question 44
Cash payment on redemption of debenture is an example of cash flow from _________ activities
A. Operating
B. Investing
C. Financing
D. Others
Question 45
Collection of book debts_____
A. Has no effect on current ratio
B. Has decreased in current ratio
C. Has increased in current ratio
D. None of these
Question 46
Common size Income Statement present the various items as a percentage of _______________
A. Sales
B. Credit sales
C. Cash sales
D. None of the above
Question 47
Comparative statements are a form of ___________________________
A. Horizontal analysis
B. Vertical analysis
C. Parellel analysis
D. None of the above
Question 48
Comparison and interpretation of ratio is known as _____________________
A. Fund flow analysis
B. Cash flow analysis
C. Ratio analysis
D. Trend analysis
Question 49
Comparison of financial variables of a firm over a period of time is known as______________
A. Comparative
B. Common-size
C. Trend analysis
D. None of the above
Question 50
Cost of good sold+operating expanses________________________
A. Total cost
B. Cost of product
C. Cost of sales
D. Operating cost
Question 51
Coverage of fixed assets by shareholder’s equity is a good tests of_______________
A. solvency
B. liquidity
C. Activity
D. profitability
Question 52
Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000,the impact on net working capital would be________________________
A. No change in working capital
B. Decrease of working capital by Rs.80,000
C. Increase of working capital by Rs.40,000
D. None of these
Question 53
Current liabilities are equals to______________________________
A. Working capital +current assets
B. Working capital-current assets
C. Current assets-working capital
D. Current asset + working capital
Question 54
Current ratio is 4:1, the amount of current liabilities is Rs.12000 the amount of working capital is_____
A. Rs.48,000
B. Rs.36000
C. Rs.30000
D. Rs.60000
Question 55
Current ratio is an example of ____________________
A. Leverage ratio
B. Liquidity ratio
C. Activity ratio
D. Turnover ratio
Question 56
Current ratio shows_____
A. The change in gross profit
B. The working capital position
C. The liquidity of assets
D. The change in net profit
Question 57
Debt equity ratio is a______________________________________
A. Profitability ratio
B. Turnover ratio
C. Short term solvency ratio
D. Long term solvency ratio
Question 58
Debt equity ratio is an example of _______________ ratios
A. Balance sheet ratio
B. Profit & loss account ratio
C. Mixed ratio
D. Liquidity ratio
Question 59
Debt service ratio is also known as ______________
A. Interest coverage ratio
B. Dividend payout ratio
C. Solvency ratio
D. Debtors turn over ratio
Question 60
Debtors turnover ratio also known as_________
A. Payable turnover
B. Receivable turnover ratio
C. Creators turnover ratio
D. Debtors velocity
Question 61
Debtors turnover ratio is used to calculate______
A. efficiency
B. solvency
C. liquidity
D. profitability
Question 62
Debtors turnover ratio measures_________
A. Short term solvency
B. Operating efficiency
C. Long term solvency
D. Credit policy
Question 63
Decrease in a creditor is a_______________ of cash
A. Inflow
B. No flow of cash
C. Outflow
D. None of these
Question 64
Decrease in current liabilities ____________________working capital
A. Increases
B. Decrease
C. Deducts
D. Reduces
Question 65
Depreciation is a source of fund__________________
A. Yes
B. No
C. Both yes or no
D. None of these
Question 66
Depreciation is sometimes treated as ______of funds
A. Outflow
B. Use
C. Source
D. No change
Question 67
Disclose accounting information
A. Balance sheet
B. Trading account
C. Profit and Loss Account
D. Financial statements
Question 68
Dividend paid are classified under__________________activities
A. Financing
B. Investing
C. Operating
D. Others
Question 69
Dividend paid under AS- 3 is_________
A. Cash flow from financing activity
B. Cash flow from operating activity
C. Cash flow from investing activity
D. None of these
Question 70
Dividend yield is an example for______ratio
A. Solvency
B. Liquidity
C. Market strength
D. Net worth
Question 71
Equity includes ______________
A. Equity share capital
B. Equity share capital+Preference share capital+-fictitious asset
C. Equity capital+Prefernce share capital+reserves snd surplus-fictious asset
D. Equity capital+Preference share capital
Question 72
Example of activity ratios ________________________
A. Gross profit ratio
B. Net profit ratio
C. Operating ratio
D. Stock turn over ratio
Question 73
Example of leverage ratio
A. Debtors velocity
B. Stock turnover ratio
C. Current ratio
D. Solvency ratio
Question 74
Excess of current asset over current liability is known as ____________
A. Gross working capital
B. Net working capital
C. Average working capital
D. None of these
Question 75
Expressed as a percentage of each asset to total
A. Common size P/L A/C
B. Common size Balance Sheet
C. Comparative Income Statement
D. Trend analysis
Question 76
External analysis is based on ____________ financial statements
A. Annual
B. Published
C. Prepared
D. Previous
Question 77
Financial Statements provide a summary of __________________________
A. Accounts
B. Assets
C. Liabilities
D. Expenses
Question 78
Flow of fund means change in __________________
A. Working capital
B. Gross capital
C. Net capital
D. Average capital
Question 79
For dividend yield ratio ______________ price of the equity shares is taken into consideration
A. Market
B. Cash
C. Cost
D. None of the above
Question 80
Fund flow refers to change in_____
A. Working capital
B. Fixed capital
C. Current capital
D. Increase in working capital
Question 81
Fund flow statement are very useful in planning intermediate and ___________ financing.
A. Short term
B. Long term
C. Medium term
D. None of these
Question 82
Fund flow statement is accompanied by a schedule of_____________________________
A. Changes in working capital
B. Flow of funds
C. Increase in fund
D. Decrease in fund
Question 83
Funds from operations are ______________of funds
A. Application
B. Uses
C. Sources
D. No change
Question 84
Furniture sold for cash _____funds flow
A. Increases
B. Decreases
C. Deducted
D. None of these
Question 85
Goodwill is a _____________________transaction
A. Current
B. Noncurrent
C. Fixed
D. None of these
Question 86
Goodwill written off is___________to the net profit made during the year for calculating the cashfrom operation
A. Added back
B. Deducted
C. Decreased
D. None of these
Question 87
Gross profit are Rs.50,000 and expenses not result in the application of funds are Rs.10000 fundsfrom operation will be
A. Rs.60000
B. Rs.50000
C. Rs. 40000
D. Rs. 30000
Question 88
Horizontal analysis is also known as _______________________
A. Static analysis
B. Structural analysis
C. Dynamic analysis
D. None of these
Question 89
Horizontal Analysis shows the comparison of data for several years against a chosen _______________ year.
A. Base year
B. Previous year
C. Financial year
D. Calender year
Question 90
If the current assets and working capital of a company are rs.80,000 and rs.50000 then currentliability will be____________
A. Rs.1,00,000
B. Rs.1,30,000
C. Rs.70000
D. Rs.30000
Question 91
In a sound business, acid test ratio __________________ is considered satisfactory
A. 01:02
B. 02:01
C. 01:01
D. 0.5:1
Question 92
In the fund flow statement, depreciation is_______________
A. Deducted from net profit
B. Added to net profit
C. Sources of working capital
D. Ignored
Question 93
In trend percentage the base year is ___________________________
A. The first year
B. Last year
C. Any year
D. Second year
Question 94
Income statement ratios are also called ___________
A. Operating ratio
B. Liquidity ratio
C. Activity ratio
D. Trend ratio
Question 95
Income tax paid should be shown separately as the cash flows from___________ activities.
A. Financing
B. Investing
C. Operating
D. Others
Question 96
Income tax payable come under __________________
A. Long term liability
B. Long term fund
C. Current liability
D. Other liabilities
Question 97
Increase in current assets____________working capital
A. Increases
B. Decreases
C. Deducts
D. Reduces
Question 98
Increase in prepaid expenses____________________cash
A. Increases
B. Added
C. Decreases
D. None of these
Question 99
Increase in the amount of bills payable results in_________
A. Decrease in cash
B. Increase in cash
C. No change in cash
D. None of these
Question 100
Increase in the amount of bills receivable results in______________
A. decrease in cash
B. increase in cash
C. no change in cash
D. none of these
Question 101
Increase in working capital is_______________________
A. Source of fund
B. Application of fund
C. Funds from operation
D. Loss from operation
Question 102
Increases in current liabilities ______________working capital
A. Increase
B. Decreases
C. Added
D. None of these
Question 103
Inflow of fund does not take place due to_______________
A. Funds from operation
B. Increase in capital
C. Increase in working capital
D. Sale of fixed asset
Question 104
Interpretation requires analysis and _________________________________
A. Comaprison
B. Determination
C. Decision Making
D. Conclusion
Question 105
Investment costing Rs.50,000 at the loss of Rs.3,000 cash outflow in investing activity is ________
A. Rs.53,000
B. Rs.50,000
C. Rs.47,000
D. Rs.48,000
Question 106
Goods purchased on credit___________inflow of funds
A. Does not result
B. Does result
C. Change
D. None of these
Question 107
Liquidity ratios measure the _________ solvency of a firm
A. Long term
B. Short term
C. Average
D. Others
Question 108
Leverage ratios are also known as ______________ ratios
A. Short term solvency ratios
B. Long term solvency ratios
C. Solvency ratio
D. Liquidity ratio
Question 109
Long term solvency of a firm can be measured by
A. Current ratio
B. Net profit ratio
C. Gross profit ratio
D. Debt equity ratio
Question 110
Lower stock turnover ratio indicates______________________________
A. Solvency position
B. Monopoly situation
C. Over investment in inventory
D. None of these
Question 111
Market price per share divided by earnings per share is______
A. Price earning ratio
B. Return on equity
C. Market test ratio
D. Book value per share
Question 112
__________________means transfer of economic value of firm from one asset or equity to another.
A. Flow of funds
B. Uses of fund
C. Inflow of funds
D. Application of funds
Question 113
Net capital employed is equal to _______________
A. Total assets minus liabilities
B. Fixed asset plus net working capital
C. Total asset minus long-term liabilities
D. Total assets
Question 114
Net decrease in working capital results in ____________________of funds
A. Source
B. Application
C. No change
D. None of these
Question 115
Net increase in working capital results in_______________of funds
A. sources
B. inflow
C. no change
D. application
Question 116
Net worth refers to owner’s__________________________
A. Equity
B. Solvency
C. Liability
D. None of these
Question 117
Operating ratio establishes the relationship between _______________ and net sales
A. Cost of goods sold
B. Cost of sales
C. Cost of production
D. Operating cost
Question 118
Powerful tool for analyzing financial statement is _________
A. Trend analysis
B. Ratio analysis
C. Analysis
D. Interpretation
Question 119
Preliminary expenses written off is________
A. Cash transaction
B. Non-cash transaction
C. Credit transaction
D. None of the above
Question 120
Profit on sale of machinery comes under____________
A. Investing activity
B. Financing activity
C. Operating activity
D. None of these
Question 121
Proposed dividend is a________
A. Current liability
B. Current asset
C. Noncurrent liability
D. Expense
Question 122
Proposed dividend is classified as___________
A. Investing activity
B. Financing activity
C. Operating activity
D. Cash equivalent
Question 123
Proprietary ratio measures the relationship between share holder fund and __________________
A. Total asset
B. Fixed asset
C. Current asset
D. Fictious asset
Question 124
Provision for tax is shown as a part of___________activity
A. financing
B. investing
C. operating
D. others
Question 125
Purchase of building by issue of debenture is a_________item and it is ignored in cash flowstatement
A. cash
B. non-cash
C. non-operating
D. current
Question 126
Purchase of fixed asset is classified as______activity
A. financing
B. investing
C. operating
D. others
Question 127
Ratio analysis is a study of relationship among various _______________ factors in a business
A. Operational
B. Official
C. Financial
D. Others
Question 128
Ratio of net profit before interest and tax to sales is______________________________
A. Solvency ratio
B. Capital gearing
C. Operating profit ratio
D. None of these
Question 129
Ratio to assess the short term debt paying capacity of a firm is_________
A. Debt equity ratio
B. Propriety ratio
C. Liquid ratio
D. Solvency ratios
Question 130
Ratios help the management in evolving market strategies through ___________
A. Inter firm comparison
B. Intra firm comparison
C. Ratios
D. None of the above
Question 131
Ratios indicate trends in important items and this helps in ___________
A. Forecasting
B. Reporting
C. Analyzing
D. Interpreting
Question 132
Ratios may be used as a measure of ____________
A. Effiency
B. Solvency
C. Profitability
D. None of the above
Question 133
Ratios of different items for various periods are calculated and compared
A. Common size
B. Comparative
C. Trend analysis
D. Ratio analysis
Question 134
Rent received by a company (whose main business is real estate) is classified as
A. Investing activity
B. Financing activity
C. Operating activity
D. Cash equivalent
Question 135
Return on investment is a_______________
A. Profit and loss account ratio
B. Balance sheet ratio
C. Combined ratio
D. Position statement ratio
Question 136
Salaries Rs.20000,depreciation for the period is Rs.30000 other operating expenses are Rs.9000,net loss for the period is Rs.5000 fund generated from operation is__________________
A. Rs.25000
B. Rs.15000
C. Rs.35000
D. Rs.14000
Question 137
Rol measures_____
A. Profitability in relation to investment
B. Profitability in relation to sales
C. Operating efficiency
D. Long term solvency
Question 138
Salary outstanding is_____ of funds
A. Source
B. Inflow
C. Application
D. No change
Question 139
Sale of patent is classified under_________
A. Investing activity
B. Financing activity
C. Operating activity
D. None of these
Question 140
Satisfactory level of debt equity ratio is ____________________
A. 01:01
B. 03:01
C. 02:01
D. 01:02
Question 141
Solvency ratio indicates_________________
A. Credit worthiness
B. Activity
C. Profitability
D. None of these
Question 142
Stock and prepaid expanses are not included in _______________
A. Current asset
B. Fixed asset
C. Current liability
D. Quick asset
Question 143
Study of the trend of the same items of two or more balance sheets
A. Common size Profit and Loss A/C
B. Common size balance sheet
C. Comparative Income statement
D. Comparative Balance Sheet
Question 144
Stock at the end results in_______________________
A. Application of fund
B. Source of fund
C. Inflow of fund
D. None of these
Question 145
Stock in the beginning results in___________
A. Application of funds
B. Source of fund
C. Inflow of fund
D. None of these
Question 146
Stock turn over ratio is an example of __________________
A. Liquidity ratio
B. Leverage ratio
C. Profitability ratios
D. Activity ratios
Question 147
Stock turnover ratio is used to determine _______________________of an enterprise
A. Profitability
B. Liquidity& solvency
C. Efficiency
D. Growth
Question 148
The asset, the amount of which can be realized within a period of one year are known as_______________
A. Current liability
B. Current asset
C. Liquid liability
D. Fixed asset
Question 149
The efficiency of the management can be measured with the help of __________________
A. Activity ratio
B. Leverage ratio
C. Liquidity ratio
D. Profitability ratio
Question 150
The index of efficiency and profitability of the business
A. Operating ratio
B. Operating profit ratio
C. Expense ratio
D. Net profit ratio
Question 151
The ideal current ratio is ____________
A. 02:01
B. 01:01
C. 01:02
D. 01:03
Question 152
The main aim of the ratio analysis is to help the _________of the firm
A. Owners
B. Officials
C. Departments
D. Management
Question 153
The mirror which reflects the true financial position of the business as on a particular date
A. Fund flow statement
B. Cash flow statement
C. Balance sheet
D. Income statement
Question 154
The operating profit and net sale of a firm are rs.2,00,000 and rs.10,00,000 respectively thenoperating ratio will be
A. 20%
B. 5%
C. 50%
D. 20%
Question 155
The process of deriving conclusions from the analysis is commonly termed as _______________
A. Analysis
B. Conclusion
C. Comparison
D. Interpretation
Question 156
The ratio of current asset to currnt liability is known as ______________
A. Liquid ratio
B. Current ratio
C. Absolute liquid ratio
D. Turn over ratio
Question 157
The ratio of liquid asset to current liabilities
A. Quick ratio
B. Current ratio
C. Absolute liquid ratio
D. Combined ratio
Question 158
The ratio that highlight the end result of business activities are known as _______________ ratios
A. Liquidity
B. Leverage
C. Activity
D. Profitability
Question 159
The ratio that includes whether investment in inventory is efficiently used or not
A. Inventory turnover ratio
B. Working capital turn over ratio
C. Fixed asset turn over ratio
D. Activity ratio
Question 160
The ratio that shows the relationship between fixed asset to share holders fund
A. Fixed asset to net worth
B. Fixed asset ratio
C. Fixed assets turn over ratio
D. Net worth ratio
Question 161
The ratio which depicts the relationship between two items,one of which is drawn from the BalanceSheet and the other from the revenue account
A. Current ratio
B. Equity Ratio
C. Net Profit ratio
D. Debtors Turn over Ratio
Question 162
The ratio which indicates how quickly debtors are converted into cash is_________
A. Receivable turnover ratio
B. Inventory turnover ratio
C. Working capital turnover ratio
D. Creditors turnover ratio
Question 163
The ratio which is a good indicator to maintain the correct selling price and efficiency of tradingactivity is______
A. Net profit ratio
B. Gross profit ratio
C. Current ratio
D. Liquid ratios
Question 164
The ratio which is used to ascertain the soundness of the long term financial position is____________
A. Debt equity ratio
B. Liquidity ratio
C. Activity ratio
D. Gross profit ratio
Question 165
The ratio which shows the relationship b/w share holder’s fund and total assets
A. Debit equity ratio
B. Proprietary ratio
C. Solvency ratio
D. Fixed asset
Question 166
The ratio which shows the relationship between borrowed funds and owners capital is _______________
A. Proprietary ratio
B. Debt equity ratio
C. Capital gearing ratio
D. Fixed asset ratio
Question 167
The ratios that shows tha capacity of the business unit to meet its short term obligation out of itsshort term resources is known as ______________
A. Solvency ratio
B. Leverage ratio
C. Liquidity ratio
D. Trend Ratio
Question 168
The relationship between total outside liabilities and total assets can be indicated through ____________
A. Fixed asset ratio
B. Solvency ratio
C. Fixed asset turn over ratio
D. Proprietary ratio
Question 169
The relationship between two amount or variables is measured with the help of ____________
A. Ratio
B. Trend
C. Comparative
D. Common size
Question 170
The statement prepared to disclose accounting information are known as_____
A. Comparative statements
B. Common size statements
C. Financial statements
D. None of the above
Question 171
The term financial ananlysis include both _________ and interpretation
A. Comparison
B. Analysis
C. Conclusion
D. Constructions
Question 172
To arrive at funds from operation ,non-cash expenses must be added to_________
A. Net profit
B. Gross profit
C. Operating profit
D. None of these
Question 173
Trend analysis is significant for
A. Forecasting and budgeting
B. Profit planning
C. Capital rationing
D. None of the above
Question 174
Under ________________________ each item of expenses taken as a percentage on net sales
A. Comparative income statement
B. Comparative balance sheet
C. Common size Balance sheet
D. Common size Income Statement
Question 175
Vertical analysis is also known as __________________
A. Dynamic analysis
B. Static analysis
C. External nalysis
D. Internal analysis
Question 176
Vertical analysis is made to review and analyse the financial statements of _________________accounting period.
A. One
B. Two
C. Three
D. Four
Question 177
When financial statements for a number of years are reviewed and analysed, the analysis is knownas _____________________
A. Vertical nalysis
B. Internal analysis
C. Horizontal analysis
D. External analysis
Question 178
When one account is current and another a non-current It results in____________________
A. Flow of fund
B. Increase of fund
C. Decrease of fund
D. None of these
Question 179
When ratios are calculated from the financial statements of one year, it is known as _____________________
A. Horizontal analysis
B. Vertiacal analysis
C. Internal Analysis
D. External analysis
Question 180
When the opening balance of cash and cash equivalent is added to the net increase , the totalwill be the____________
A. Closing balance of cash
B. Closing balance of bank
C. Opening balance of bank
D. Closing balance of cash and cash equivalent
Question 181
Which of the following does not affect the fund flow statement
A. Issue of shares
B. Borrowing
C. Repayment of loan
D. Payment to creditors
Question 182
Which of the following does not affect working capital_________
A. Bank overdraf
B. Debenture
C. Cash
D. Bank
Question 183
Which of the following is a non-current liability
A. Mortgage loan
B. Bank balance
C. Outstanding salary
D. None of these
Question 184
Which of the following is an application of fund
A. Sale of plant
B. Issue of shares
C. Purchase of funds
D. Payment of creditors
Question 185
Which of the following is non-current asset
A. Goodwill
B. Debtors
C. Stock
D. Prepaid rent
Question 186
Which of the following is not an inflow of cash
A. Sale of fixed asset
B. Issue of debentures for cash
C. Funds from operation
D. Acquisition of assets
Question 187
Which of the following will affect the flow of fund
A. a transaction affecting current and non-current accounts
B. a transaction affecting both non-current accounts
C. a transaction affecting both current accounts
D. both a) and b)
Question 188
The two concept of working capital are gross working capital and __________________________
A. Net working capital
B. Average working capital
C. Opening working capital
D. Closing working capital
Question 189
Working capital is expressed as______
A. Current asset-fixed asset
B. Fixed assets-current liabilities
C. Current assets-current liabilities
D. None of these
Question 190
Yard stick which measures relationship between two variables
A. Financial statements
B. Ratio
C. Fund Flow analysis
D. Cash flow analysis