Analysis of Financial Statements — Accountancy STD 12 Commerce — Question

Bills Receivable A/c is _________.

1. Personal A/c
2. Real A/c
3. Nominal
4. None of the above

Which of the following statements is true?

1. Par value must be separately reported in the balance sheet because it represents the market value of the shares when it was first issued
2. Selling common shares for more than par value results in gain that is reported in the income statement
3. Common shareholders assume a higher investment risk than long-term creditors
4. Non-convertible debentures cannot be issued by companies

Conclusion base on financial analysis may be non-reliable because financial statement is based on certain concepts and conventions. This Statement Can be Limitation of __________.

1. Internal Analysis
2. Financial Analysis
3. Vertical Analysis
4. Trend Analysis

Analysis of financial statements involve:

1. Trading A/c
2. Profit & Loss statement
3. Balance Sheet
4. All the above

Cash Management and Insurance are chief function of the ____________.

1. Tax Manager
2. Controller
3. Treasurer
4. Accountant

Outstanding business rent of Rs.15,000 was paid by the proprietor from his purse. The effect on the balance sheet is that _______.

1. Both liabilities and assets are increased
2. Both liabilities and assets are decreased
3. Liabilities are increased, while the assets are decreased
4. Liabilities are decreased, while the assets are increased

You require capital for purchase of fixed assets. What is this capital called?

1. Floating capital
2. Reserve capital
3. Circulating capital
4. Fixed capital

The balance in capital reduction a/c after writing off all accumulated loss, fictitious assets and overvalued assets are transferred to _______.

1. Capital reserve
2. General reserve
3. Reserve capital
4. Goodwill

Exampal of cash flow from financing activity is:

1. Payment of dividend.
2. Receipt of dividend, on investment.
3. Cash received from customer.
4. Purchase of fixed asset.

The most commonly used classification of ratio is:

1. Activity ratios
2. Solvency ratios
3. Liquidity ratios
4. All of the above