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Accountancy MCQ Class 12 Chapter 9

1. ________ is not a limitation of financial statement analysis.
(a) To measure the financial strength
(b) Affected by window-dressing
(c) Do not reflect changes in the price level
(d) Lack of qualitative analysis

2. Interpretation of Financial Statements includes:
(a) Criticisms and Analysis
(b) Comparison and Trend Study
(c) Drawing Conclusion
(d) All the above

3. Comparative Statements are also known as :
(a) Dynamic Analysis
(b) Horizontal Analysis
(c) Vertical Analysis
(d) External Analysis

4. Comparative financial analysis process shows the comparison between the items of which statement?
(a) Balance sheet
(b) Profit and loss statement
(c) Both (a) and (b)
(d) None of the above

5. Common-size Statement are also known as:
(a) Dynamic Analysis
(b) Horizontal Analysis
(c) Vertical Analysis
(d) External Analysis

6. What is the break-even point, and what does it refer to?
(a) Total costs are more than total sales
(b) Total costs are less than total sales
(c) Total costs are half of the total sales
(d) Total costs are equal to total sales

7. The most commonly used tools for financial analysis are:
(a) Comparative Statements
(b) Common-size Statement
(c) Accounting Ratios
(d) All the above

8. Which of the following explains the significance of financial analysis?
(a) Ignores qualitative aspect
(b) Judges operational efficiency
(c) Suffers from the limitations of financial statements
(d) It is affected by personal ability and bias of the analysis

9. For calculating trend percentages any year is selected as:
(a) Current year
(b) Previous year
(c) Base year
(d) None of these

10. Which of the below options is/are the purpose or objective of financial analysis?
(a) To assess the current profitability of the firm
(b) To measure the solvency of the firm
(c) To assess the short-term and long-term liquidity position of the firm
(d) All of the above

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