Free Accountancy Multiple Choice Questions for Class 12 CBSE along with the answers Chapter 9: Analysis of Financial Statements. Accountancy MCQs for Class 12 chapter-wise with the answers are prepared based on the current exam pattern. Students will be able to tackle the MCQs with these answers to realise their spadework level.
1. Comparative financial analysis process shows the comparison between the items of which statement?
(a) Balance sheet
(b) Profit and loss statement
(c) Both (a) and (b)
(d) None of the above
(c) Both (a) and (b)
2. What is the break-even point, and what does it refer to?
(a) Total costs are more than total sales
(b) Total costs are less than total sales
(c) Total costs are half of the total sales
(d) Total costs are equal to total sales
Answer: (d) Total costs are equal to total sales
3. __________ is also known as vertical analysis.
(a) Fluctuation analysis
(b) Static analysis
(c) Horizontal analysis
(d) None of the above
Answer: (b) Static analysis
4. Which of the following explains the significance of financial analysis?
(a) Ignores qualitative aspect
(b) Judges operational efficiency
(c) Suffers from the limitations of financial statements
(d) It is affected by personal ability and bias of the analysis
Answer: (b) Judges operational efficiency
5. Which of the below options is/are the purpose or objective of financial analysis?
(a) To assess the current profitability of the firm
(b) To measure the solvency of the firm
(c) To assess the short-term and long-term liquidity position of the firm
(d) All of the above
Answer: (d) All of the above
6. ___________ is not a limitation of financial statement analysis.
(a) To measure the financial strength
(b) Affected by window-dressing
(c) Do not reflect changes in the price level
(d) Lack of qualitative analysis
Answer: (a) To measure the financial strength
7. Which of the following is/are included in the financial statements of a business enterprise?
(a) Balance sheet
(b) Profit and loss account
(c) Cash flow statement
(d) All of the above
Answer: (d) All of the above
8. Balance sheet provides information about the financial position of the enterprise _____.
(a) At a point of time
(b) Over a period of time
(c) For a period of time
(d) None of the above
Answer: (a) At a point of time
9. Which of the below formula is correct?
(a) Assets = Liabilities + Shareholders’ funds
(b) Assets = Total funds
(c) Assets = Funds of outsiders
(d) None of the above
Answer: (a) Assets = Liabilities + Shareholders’ funds
10. Which of the following is the type of financial analysis based on the process?
(a) Horizontal Analysis
(b) Vertical Analysis
(c) Ratio Analysis
(d) Both (a) and (b)
Answer: (d) Both (a) and (b)
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