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CBSE Questions for Class 12 Commerce Accountancy Analysis Of Financial Statements Quiz 2 - MCQExams.com
CBSE
Class 12 Commerce Accountancy
Analysis Of Financial Statements
Quiz 2
A sale of typewriter that as been used in the office should be credited to ______________.
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Cash Account.
0%
Sales Account.
0%
Office Equipment Account.
0%
Bank Account.
Explanation
A sale of typewriter that as been used in the office should be credited to office equipment or typewriter account.
As when we sale the fixed asset then asset will reduce and journal will be:
Bank a/c Dr
To Asset a/c
Hence c is the correct answer.
The most commonly used tools for financial analysis are _______________.
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0%
Horizontal analysis
0%
Vertical analysis
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Ratio analysis
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All of the above
Explanation
Commonly used tools of financial analysis are: Comparative statements, Common size statements, trend analysis, ratio analysis, funds flow analysis, and cash flow analysis.
_____________ increases both total assets as well as owner's equity.
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0%
Credit purchases
0%
Retained earnings
0%
Bank loans
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Drawings
Explanation
Profits earned by the business are generally considered as retained earning, if not withdrawn by the owners. If firm generate the profits and retained in the business, cash of the firm increases which is part of the total assets. Parallel to this, all profits which are retained in the business are ultimately part of owners capital, hence it increases.
Calculate dividend yield on the ordinary shares _______________.
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0%
$$15\%$$
0%
$$10\%$$
0%
$$5\%$$
0%
$$2\%$$
Accounts which relates to assets tangible or intan
gible are called ________ .
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Personal a/c
0%
Real a/c
0%
Nominal a/c
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Impersonal a/c
Explanation
There are mainly three types of accounts: Real, Personal and Nominal accounts. Personal accounts are classified into three subcategories: Artificial, Natural and Representative. All assets of a firm, which are tangible or intangible, fall under the category "Real Accounts". Tangible real accounts are related to things that can b touched and felt physically, e.g., building, machinery, stock, land, etc. Intangible real accounts are related to things that can't be touched and felt physically, e.g., goodwill, patents, trademarks, etc.
When each co-venturer open his own account, the profit from Joint Venture A/c is
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Credited to joint venture with other A/c
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Debited to joint venture with other A/c
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Debited to memorandum A/c
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Credited to general profit and loss A/c
Bills Receivable A/c is _________.
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Personal A/c
0%
Real A/c
0%
Nominal
0%
None of the above
Explanation
There are mainly three types of account: Real, Personal and Nominal accounts. Personal accounts are classified into three subcategories: Natural, Artificial and Representative. Bills Receivable and Bills Payable are personal accounts. Both these accounts represent debtors and creditors of a particular entity. The rule of personal account is Debit the receiver, Credit the giver. Suppose when Bills Receivable is issued, its debited because that represents debtor from whom money is receivable. In a way the entity has given those debtors a benefit i.e. credit so as per the rule Bills Receivable A/c is debited. Hence, bills receivable is a personal a/c.
Match the following
List-I (Types of Financial Analysis)
List-II (Main Characteristics)
(a) Dynamic Analysis
Depends on published
(b) Static Analysis
Horizontal Analysis
(c) Internal Analysis
Vertical Analysis
(d) External Analysis
More confidential
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(a)-3, (b)-4, (c)-1, (d)-2
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(a)-2, (b)-3, (c)-4, (d)-1
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(a)-1, (b)-4, (c)-2, (d)-3
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(a)-4, (b)-2, (c)-1, (d)-3
Loss of stock by fire would lead to ____________.
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No change in total assets
0%
Total assets to decrease
0%
Total assets to increase
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Total assets and owners equity to decrease
Explanation
Loss of stock by fire will lead to decrease in closing stock on the asset side of balance sheet and decrease in net income of profit and loss account, i.e. decrease in owner's equity on the liability side of the balance sheet.
Tick the false statements
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Cash basis of accounting is valid under the Companies Act
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Cash basis and accrual basis of accounting will show different operating results
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Unexpired discount is a personal account
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Consistency concept facilitate inter firm comparison
For the current year, the following data were taken from the accounting records.
Sales 850,000
Sales Return and Allowances 36,000
Purchases 500,000
Purchases Return and Allowances 8,000
Discount received 4,000
Freight-in 2,000
Beginning Inventory 30,000
Ending inventory 90,000
Find net sales.
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0%
830,000
0%
81,000
0%
880,000
0%
814,000
A company just starting in business purchased three inventory items at the following prices: first purchase 80: second purchase 95: third purchaseIf the company sold two units for a total of 200 and used LIFO costing, the gross profit for the period would be ___________.
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0%
25
0%
35
0%
20
0%
10
Explanation
Under LIFO, the units received in the last would get out first, units of Rs.200 are sold, the cost of the units is Rs.95 and Rs.85 would get out first. Gross Profit = Sale - Cost = 200 - (95 + 85) = Rs.20. Hence, the correct option is C.
Financial statements are used by __
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Owners
0%
Creditors
0%
Tax authorities
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All the three
Explanation
Most Common Users of Financial Statements
1:Management of the Company.
2:Investors.
3:Customers.
4:Competitors.
5:Government and Tax authorities
6:Employees.
7:Investment Analysts.
8:Lenders or Creditors
Hence d is the correct answer.
Reserve is a charge against which of these A/c
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Trading A/c
0%
Profit and loss appropriation A/c
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Profit and loss A/c
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Manufacturing A/c
Income distribution of Industrial workers of a city follows normal distribution pattern with a mean wages of Rs. 600 pm, standard deviation of Rs.228 workers have monthly income more than Rs. 700 per month. Find the total number of industrial workers in the city........
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5000
0%
10,000
0%
8750
0%
7500
ABC Ltd. has the following account balances.
Purchases Rs. 20,000
Sales Returns and Allowances 4,000
Discount on sales 2,500
Freight-in 1,875
Freight-in 2,500
The cost of goods purchased for the period is _________.
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Rs. 22,500
0%
Rs. 27,300
0%
Rs. 21,875
0%
Rs. 20,825
Sinking fund A/c is created for which of these purposes
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to repay or redeem a long term fixed liability
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to replace a wasting asset
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to replace a depreciable asset
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all the three
Select the correct statement.
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General reserve is created out of divisible profits
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General reserve is used for some specified purposes
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Revenue reserve include capital reverse also
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All the three
Explanation
General reserve is created out of divisible profits. This is the only true statement. General reserve is created to meet any future uncertainties, they are basically the retained earnings of the company.
X considered 1000 boxes of grapes costing Rs.200 per box to Y. X incurred Rs.4500 towards transportation and insurance. Y paid Rs. 4000 as godowns rent and Rs. 500 as sales man commission. During road transportation 50 boxes were stolen. Find the value of abnormal loss.
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Rs. 11000
0%
Rs. 10225
0%
Rs. 10500
0%
Rs. 10900
Explanation
.
The value at which an item appears in the financial statement is called its
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0%
Historical cost
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Book value
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Current cost
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Depreciable value
An information is regarded material if.......
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Its omission or misstatement could influence the decision of the users of the financial statement
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It meets some financial benchmark
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If it is substantiated by material evidence
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All the three
Which of these event is not a subject-matter of financial accounting.
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Marriage of key executive of the company.
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Insurance claim settled by the Insurance company.
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Retrenchment compensation to the workers
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Bad debts written off recovered
Explanation
Marriage of key executive of the company
is not a subject-matter of financial accounting. Hence, the correct option is A.
Who of the following can be considered as an internal user of financial statement?
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Employees
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Creditors
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Bankers
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Government Departments
Explanation
Management of the business is the internal user of financial statements. Internal users are people within a business organization who use financial information.
Therefore, A is the correct option.
Which of these types of accounting is catered to the need of external users of financial statements.
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Management Accounting
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Financial Accounting
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Managerial accounting
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Cost Accounting
Explanation
The purpose of financial accounting is to comply with external regulations. Internal personnel are not responsible for the financial analysis and decision-making; managerial accounting is utilised for this.
Hence correct answer is option b.
Which of these information is not readily available from financial statements :......
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Net profit
0%
Provision for taxation
0%
Gross block
0%
Cost of production
Divisible profit includes the following except........
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0%
Dividend equalization reserve
0%
Capital reserve
0%
Profit and loss A/c
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General reserve
A company is expected to earn a profit of Rs.$$1$$ crore from a contract next year, the Accountant of the company is reluctant to account for this expected profit in the current year. He is guided by the Accounting concept of......
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Materiality
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Consistency
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Conservatism
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Matching
Explanation
This accounting concept promotes prudence in accounting. It states that profit should not be included until it is realized.
Conservatism is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.
Hence c is the correct answer
$$A$$ purchased a car for Rs. $$10,00,000$$, making a down payment of Rs. $$1,00,000$$ and signing a Rs. $$9,00,000$$ bill payable due in 60 days. As a result of this transaction.
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Total asset increased by Rs. $$10,00,000$$
0%
Total liabilities increased by Rs. $$9,00,000$$
0%
Total asset increased by Rs. $$9,00,000$$
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Total asset increased by Rs. $$9,00,000$$ with corresponding increase in liabilities by Rs. $$9,00,000$$
Explanation
A purchased a car for Rs. 10,00,000, making a down payment of Rs. 1,00,000 means we purchasing asset of 10,00,000.
As "A" paid the 1,00,000 then a liability of 9,00,000 will arise.
Hence
total assets increased by Rs. 9,00,000 with a corresponding increase in liabilities by Rs. 9,00,000.
So option d is the correct answer.
______________ are long term prepaid expenses which benefits several years in future.
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0%
deferred charges
0%
prepaid expenses
0%
miscellaneous expenses to be written off
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current expenses
Explanation
Deferred expenses, also called prepaid expenses or accrued expenses, refer to expenses that have been paid but not yet incurred by the business. Common prepaid expenses may include monthly rent or insurance payments that have been paid in advance.
Therefore, A is the correct option.
Purchase of office equipment on credit results in ________________.
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Decrease in liability
0%
Decrease in Capital
0%
Increase in Capital
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Increase in assets
Explanation
After purchasing office equipment on credit, there is an increment both in asset and liability.
Office equipment is coming into the business will result in increase in asset and amount payable to vendor will result in increase in liability.
Therefore, D is the correct answer.
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