Comparative Statement of Profit and Loss

Q.

Distinguish between Receipts and Payments Account and Income and Expenditure Account.

Q.

Which of the following is not a limitation of ‘Financial Statements Analysis’?

1. It is affected by personal bias.

2. Intra-firm comparison.

3. Lack of qualitative analysis.

4. Ignores price level changes

Q.

Explain the basic features of Income and Expenditure Account and of Receipt and Payment Account.

Q. Explain the usefulness of trend percentages in interpretation of financial performance of a company.

Q. List the techniques of Financial Statement Analysis.

Q.

Which statement express all items of financial statement as a percentage of some common base such as total assets for balance sheet?

1. Actual

2. Potential

3. Net

4. None of these

Q.

Techniques which are used to identify financial statements trends include -

1. common size analysi

2. percent change analysis

3. returning ratios analysis

4. Both common size analysis and percent change analysis

Q.

When financial statement figures for two or more years are placed side-by-side to facilitate comparison , these are called _________.

1. Art and science of translating the figures

2. To know financial strengths and weaknesses of a business

3. To know the causes for the prevailing performance of business

4. All of these

Q.

Employee benefit expenses can be increased due to :

1. Number of employees has increased

2. The salaries of existing employees have increased

3. Either the number of employees has increased or the salaries of existing employees have increased or mix of both

4. None of these

Q.

What is the importance of comparative statements? Illustrate your answer with particular reference to comparative income statement.

Q. Select the most appropriate alternative from those given below and rewrite the statement.

_________________ is the list of all ledger balances.
a) balance sheet
b) trial balance
c) trading A/c
d) profit and loss A/c

Q.

Distinguish between Vertical and Horizontal Analysis of financial data.

Q.

State the meaning of Income and Expenditure Account.

Q. Answer the following in brief :

What is comparative financial statement?

Q. The closing stock of the year becomes the ______ of the next year.

1. Liabilities
2. Asset
3. Opening stock
4. Dead stock

Q.

The 3rd column in the comparative statement is ___

1. Percentage increase or decrease

2. None of these

3. Absolute increase or decrease

4. Either Percentage increase or decrease OR Absolute increase or decrease

Q.

Comparative financial statements present financial data for several years side by side. Data may be presented in the form of ___

1. Absolute values

2. Percentage

3. Both Absolute values & Percentage

4. None of these

Q.

It is a statement which shows the comparison of the total income earned and expenses incurred during two or more accounting periods.

1. Comparative income statement

2. Comparative balance sheet

3. Cash flow statement

4. All of these

Q. Interest on a term loan for the purchase of machinery where the commercial production has not begun till the last day of the accounting year is _________________.

1. Revenue Expenditure
2. Capital Expenditure
3. Deferred Revenue Expenditure
4. Prepaid Expenses

Q.

Explain the basic features of Income and Expenditure Account and of Receipt and Payment Account.

Q. change is the difference between the previous year and the current year figures.

1. Percentage
2. Absolute
3. Previous year
4. Current year

Q.

The total of the % column of assets side in the common size balance sheet comes out to ___

1. None of these

2. 75

3. 50

4. 100

Q. Trading account is a _________ account.

1. personal
2. real
3. none of these
4. nominal

Q. Interest receivable from Mohan ( a Borrower) Account is -

1. An Asset Account
2. A Liability Account
3. An Expense Account
4. A Revenue Account

Q. Objective type questions.
Answer in one sentence only.

Why is it difficult to ascertain the correct profit or loss under Single Entry system?

Q. 'To determine the trend of different items of statement', is one of the objectives of common-size statements.

1. True
2. False

Q. Common size analysis is also known as ______ analysis.

1. Horizontal
2. Ratio
3. Vertical
4. Trend

Q. The balance of Income and Expenditure account represents:

1. The balance of cash on that date.
2. The total cash receipts during the period.
3. The total cash payments during the period.
4. The excess of expenditure over income and vice-versa.

Q. Objective type questions :-
Answer in one sentence only.

What do you mean by accrued Income?

Q. Write one Word / Term / Phrase for each of the following statement.

An Account, which is prepared by ‘Not for Profit’ concern, instead of Profit and Loss Account.