# Analysis of Financial Statements MCQ Questions for Class 12 Accountancy Chapter 9 with Answers

NCERTCOURSE.COM- Find here the NCERT/CBSE chapter-wise Multiple Choice Questions from Class 12 Accountancy book Chapter 9 Analysis of Financial Statements with Answers Pdf free download. This may assist you to understand and check your knowledge about the chapters. Students also can take a free test of the Multiple Choice Questions of Analysis of Financial Statements. Each question has four options followed by the right answer. These MCQ Questions are selected supported by the newest exam pattern as announced by CBSE.

## Q1. Which of the following is not a tool of financial statement analysis?

(i) Cash Flow Statement
(ii) Statement showing distribution of dividend
(iii) Ratio Analysis
(iv) Comparative Financial Statements

(ii) Statement showing distribution of dividend

## Q2. The financial statements of a business enterprise include :

(i) Balance sheet
(ii) Statement of Profit and loss account
(iii) Cash flow statement
(iv) All the above

(iv) All of the above

## Q3. Vertical Analysis is also known as :

(i) Static Analysis
(ii) Dynamic Analysis
(iii) Structural Analysis
(iv) None of these

(i) Static Analysis

## Q4. Which of the following is not recognized as tool for the analysis of financial statements?

(i) Cash Flow Statement
(ii) Funds Flow Statement
(iii) Trend Analysis
(iv) Statement showing distribution of dividends

(iv) Statement showing distribution of dividends

## Q5. When financial statements of several years are analysed, it is termed as

(i) None of the options
(ii) Horizontal analysis
(iii) Current ratios
(iv) Vertical analysis

(iv) Vertical analysis

## Q6. Comparative Statements are also known as :

(i) Dynamic Analysis
(ii) Horizontal Analysis
(iii) Vertical Analysis
(iv) External Analysis

(ii) Horizontal Analysis

## Q7. Financial analysis can be done with which of the following tool?

(i) Ratio Analysis
(ii) Cash Flow Statement
(iii) Comparative Statements
(iv) All of the above

(iv) All of the above

## Q8. The most commonly used tools for financial analysis are :

(i) Horizontal analysis
(ii) Vertical analysis
(iii) Ratio analysis
(iv) All the above

(iv) All the above

## Q9. Common-size Statement are also known as:

(i) Dynamic Analysis
(ii) Horizontal Analysis
(iii) Vertical Analysis
(iv) External Analysis

(iii) Vertical Analysis

## Q10. Which of the following is not an objective of financial statement analysis?

(i) Efficiency of the Management
(ii) Price Level Changes
(iii) Profitability of the Enterprise
(iv) Solvency of the Enterprise

(ii) Price Level Changes

## Q11. An Annual Report is issued by a company to its :

(i) Directors
(ii) Auditors
(iii) Shareholders
(iv) Management

(iii) Shareholders

## Q12. The analysis of financial statement by a shareholder is an example of:

(i) External Analysis
(ii) Internal Analysis
(iii) Vertical Analysis
(iv) Horizontal Analysis

(i) External Analysis

## Q13. Who has the interest in long-term solvency position of the firm?

(i) Creditors
(ii) Bankers providing overdraft facilities
(iii) Financial Institutions
(iv) Short-term money lenders

(iii) Financial Institutions

## Q14. Balance Sheet provides information about financial position of the enterprise :

(i) At a point in time
(ii) Over a period of time
(iii) For a period of time
(iv) None of the above

(i) At a Point in time

## Q15. Tools for comparison of financial statements are :

(i) Comparative Balance Sheet
(ii) Comparative Income Statement
(iii) Common-size Statement
(iv) All the above

(iv) All the above

## Q16. Which of the following is not a limitation in the analysis of financial statements?

(i) Ignores Price Level Changes
(ii) Window Dressing
(iii) Financial performance of the firm
(iv) Bias of the Analyst

(iii) Financial performance of the firm

## Q17. Comparative statements are also known as :

(i) Dynamic analysis
(ii) Horizontal analysis
(iii) Vertical analysis
(iv) External analysis

(ii) Horizontal analysis

## Q18. Comparative Financial Statements show:

(i) Financial position of a concern
(ii) Earning capacity of a concern
(iii) Both of them
(iv) None of these

(iii) Both of them

## Q19. Which one of the following is tool of financial analysis?

(i) Comparative Statements
(ii) Common-size Statements
(iii) Cash Flow Statement
(iv) All of these

(iv) All of these

## Q20. Common-size financial statements are mostly prepared:

(i) In proportion
(ii) In percentage
(iii) (i) and (ii) both
(iv) None of these

(ii) In percentage

## Q21. When bad position of the business is tried to be depicted as good, it is known as …………….

(i) Personal Bias
(ii) Price Level Changes
(iii) Window Dressing
(iv) All of the Above

(iii) Window Dressing

## Q22. Sales less Cost of goods sold is called :

(i) Operating Profit
(ii) Gross Profit
(iii) Net Profit
(iv) Total Profit

(ii) Gross Profit

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