CBSE Class 12 Accountancy Analysis of Financial Statement and Tools MCQs Set E

Question: When bad position of the business is tried to be depicted as good it is known as
a) Personal bias
b) Price level changes
c) Window dressing
d) All of the options
Answer: c

Question: Main Objective of Analysis of Financial Statement is
a) To know the financial strength
b) To make a comparative study with other firms
c) To know the efficiency of management
d) All of the options
Answer: d

Question: Analysis of Financial Statement is significant
a) For creditors
b) For Managers
c) For employees
d) All of the options
Answer: d

Question: Main limitation of Analysis of Financial Statement is
a) Affected by window dressing
b) Difficulty in forecasting
c) Does not reflect changes in price level
d) All of the options
Answer: d

Question: Main Objective of Analysis of Financial Statement is
a) To know the financial strength
b) To make a comparative study with other firms
c) To know the efficiency of management
d) All of the options
Answer: d

Question: When bad position of the business is tried to be depicted as good it is known as
a) Personal bias
b) Price level changes
c) Window dressing
d) All of the options
Answer: c

Question: Financial Analysis becomes useless because it
a) Measures the profitability
b) Measures the solvency
c) Lacks qualitative analysis
d) Makes a comparative study
Answer: c

Question: Which analysis is considered as Static?
a) Horizontal Analysis
b) Vertical Analysis
c) Internal Analysis
d) External Analysis
Answer: a

Question: Feature of financial analysis is to present the data contained in financial statements in
a) Easy form
b) Convenient and rational groups
c) Comparable form
d) All of the above
Answer: d

Question: Analysis of Financial Statement is significant
a) For creditors
b) For Managers
c) For employees
d) All of the options
Answer: d

Question: Which analysis is considered as dynamic?
a) Horizontal Analysis
b) Vertical Analysis
c) Internal Analysis
d) External Analysis
Answer: a

Question: Financial Analysis becomes significant because it
a) Ignores price level changes
b) Measures the efficiency of business
c) Lacks qualitative analysis
d) Is effected by personal bias
Answer: b

Question: Feature of financial analysis is to present the data contained in financial statements in
a) Easy form
b) Convenient and rational groups
c) Comparable form
d) All of the above
Answer: d

Question: Which Analysis is based on one year’s data?
a) Horizontal Analysis
b) Vertical Analysis
c) Cash Flow Statement
d) Dividend Analysis
Answer: b

Question: Financial Analysis becomes useless because it
a) Measures the profitability
b) Measures the solvency
c) Lacks qualitative analysis
d) Makes a comparative study
Answer: c

Question: Which analysis is considered as Static?
a) Horizontal Analysis
b) Vertical Analysis
c) Internal Analysis
d) External Analysis
Answer: b

Question: Main limitation of Analysis of Financial Statement is
a) Affected by window dressing
b) Difficulty in forecasting
c) Does not reflect changes in price level
d) All of the options
Answer: d

Question: Which Analysis is based on one year’s data?
a) Horizontal Analysis
b) Vertical Analysis
c) Cash Flow Statement
d) Dividend Analysis
Answer: b

Question: Financial Analysis becomes significant because it
a) Ignores price level changes
b) Measures the efficiency of business
c) Lacks qualitative analysis
d) Is effected by personal bias
Answer: b