Question 1

Afford full diagnosis of the profitability and financial position

Accepted Answer

A)  Preparation of Profit and Loss Account
B)  Balance Sheet
C)  Final Accounts
D)  Analysis of financial statementsE) B) and C)
F) B) and D)

Question 2

Vertical analysis is also known as ------------------

Accepted Answer

A)  Dynamic analysis
B)  Static analysis
C)  External nalysis
D)  Internal analysisE) B) and C)
F) All of the above B

Question 3

------------------------ helps in drawing inferences of conclusions

Accepted Answer

A)  Analysis
B)  Interpretation
C)  Comparison
D)  None of the aboveE) C) and D)
F) A) and D)

Question 4

The statement prepared to disclose accounting information are known as-----

Accepted Answer

A)  Comparative statements
B)  Common size statements
C)  Financial statements
D)  None of the aboveE) A) and C)
F) A) and D)

Question 5

Horizontal Analysis shows the comparison of data for several years against a chosen ---------------- year.

Accepted Answer

A)  Base year
B)  Previous year
C)  Financial year
D)  Calender yearE) None of the above
F) A) and C)

Question 6

---------------- establishes the relationship of different individual items which same common items

Accepted Answer

A)  Common size statements
B)  Comparative statements
C)  Trend analysis
D)  Comparative Income StatementE) A) and C)
F) B) and C)

Question 7

----------- helps to disclose financial position

Accepted Answer

A)  Trial Balance
B)  Profit and Loss Account
C)  Balance sheet
D)  Income StatementE) A) and D)
F) C) and D) C

Question 8

Horizontal analysis is also known as -----------------------

Accepted Answer

A)  Static analysis
B)  Structural analysis
C)  Dynamic analysis
D)  None of theseE) A) and B)
F) B) and C)

Question 9

External analysis is based on ------------- financial statements

Accepted Answer

A)  Annual
B)  Published
C)  Prepared
D)  PreviousE) None of the above
F) B) and C)

Question 10

Comparison of financial variables of a firm over a period of time is known as--------------

Accepted Answer

A)  Comparative
B)  Common-size
C)  Trend analysis
D)  None of the aboveE) B) and C)
F) A) and D)

Question 11

Disclose accounting information

Accepted Answer

A)  Balance sheet
B)  Trading account
C)  Profit and Loss Account
D)  Financial statementsE) B) and C)
F) A) and D)

Question 12

Financial Statements provide a summary of --------------------------

Accepted Answer

A)  Accounts
B)  Assets
C)  Liabilities
D)  ExpensesE) B) and C)
F) None of the above A

Question 13

Trend analysis is significant for

Accepted Answer

A)  Forecasting and budgeting
B)  Profit planning
C)  Capital rationing
D)  None of the aboveE) A) and D)
F) A) and C)

Question 14

Common size Income Statement present the various items as a percentage of ----------------

Accepted Answer

A)  Sales
B)  Credit sales
C)  Cash sales
D)  None of the aboveE) B) and C)
F) A) and B)

Question 15

Study of the trend of the same items of two or more balance sheets

Accepted Answer

A)  Common size Profit and Loss A/C
B)  Common size balance sheet
C)  Comparative Income statement
D)  Comparative Balance SheetE) C) and D)
F) None of the above

Question 16

Interpretation requires analysis and ----------------------------------

Accepted Answer

A)  Comaprison
B)  Determination
C)  Decision Making
D)  ConclusionE) A) and B)
F) A) and C)

Question 17

The process of deriving conclusions from the analysis is commonly termed as ----------------

Accepted Answer

A)  Analysis
B)  Conclusion
C)  Comparison
D)  InterpretationE) B) and D)
F) B) and C)

Question 18

When financial statements for a number of years are reviewed and analysed, the analysis is known as ---------------------

Accepted Answer

A)  Vertical nalysis
B)  Internal analysis
C)  Horizontal analysis
D)  External analysisE) A) and D)
F) C) and D)

Question 19

In trend percentage the base year is ----------------------------

Accepted Answer

A)  The first year
B)  Last year
C)  Any year
D)  Second yearE) None of the above
F) B) and C)

Question 20

When ratios are calculated from the financial statements of one year, it is known as ---------------------

Accepted Answer

A)  Horizontal analysis
B)  Vertiacal analysis
C)  Internal Analysis
D)  External analysisE) A) and B)
F) B) and C)

Exam 1: Financial Analysis Techniques and Terminologies

Afford full diagnosis of the profitability and financial position

Correct AnswerverifiedShow Answer

Vertical analysis is also known as ------------------

Correct AnswerverifiedB

------------------------ helps in drawing inferences of conclusions

Correct AnswerverifiedShow Answer

The statement prepared to disclose accounting information are known as-----

Correct AnswerverifiedShow Answer

Horizontal Analysis shows the comparison of data for several years against a chosen ---------------- year.

Correct AnswerverifiedShow Answer

---------------- establishes the relationship of different individual items which same common items

Correct AnswerverifiedShow Answer

----------- helps to disclose financial position

Correct AnswerverifiedC

Horizontal analysis is also known as -----------------------

Correct AnswerverifiedShow Answer

External analysis is based on ------------- financial statements

Correct AnswerverifiedShow Answer

Comparison of financial variables of a firm over a period of time is known as--------------

Correct AnswerverifiedShow Answer

Disclose accounting information

Correct AnswerverifiedShow Answer

Financial Statements provide a summary of --------------------------

Correct AnswerverifiedA

Trend analysis is significant for

Correct AnswerverifiedShow Answer

Common size Income Statement present the various items as a percentage of ----------------

Correct AnswerverifiedShow Answer

Study of the trend of the same items of two or more balance sheets

Correct AnswerverifiedShow Answer

Interpretation requires analysis and ----------------------------------

Correct AnswerverifiedShow Answer

The process of deriving conclusions from the analysis is commonly termed as ----------------

Correct AnswerverifiedShow Answer

When financial statements for a number of years are reviewed and analysed, the analysis is known as ---------------------

Correct AnswerverifiedShow Answer

In trend percentage the base year is ----------------------------

Correct AnswerverifiedShow Answer

When ratios are calculated from the financial statements of one year, it is known as ---------------------

Correct AnswerverifiedShow Answer

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