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Test: Tools Of Financial Analysis - 1 - Commerce MCQ


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10 Questions MCQ Test Accountancy Class 12 - Test: Tools Of Financial Analysis - 1

Test: Tools Of Financial Analysis - 1 for Commerce 2024 is part of Accountancy Class 12 preparation. The Test: Tools Of Financial Analysis - 1 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Tools Of Financial Analysis - 1 MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Tools Of Financial Analysis - 1 below.
Solutions of Test: Tools Of Financial Analysis - 1 questions in English are available as part of our Accountancy Class 12 for Commerce & Test: Tools Of Financial Analysis - 1 solutions in Hindi for Accountancy Class 12 course. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free. Attempt Test: Tools Of Financial Analysis - 1 | 10 questions in 10 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Accountancy Class 12 for Commerce Exam | Download free PDF with solutions
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Test: Tools Of Financial Analysis - 1 - Question 1

While preparing Statement of Profit and Loss , net sales is Recorded as:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 1

A Profit and Loss (P & L) statement measures a company's sales and expenses during a specified period of time. The function of a P & L statement is to total all sources of revenue and subtract all expenses related to the revenue. It shows a company's financial progress during the time period being examined.

Test: Tools Of Financial Analysis - 1 - Question 2

While preparing statement of P/L, salaries and wages are shown under:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 2

Salaries and wages are shown under employee benefit expense while preparing statement of P/L.

Test: Tools Of Financial Analysis - 1 - Question 3

Vinod Limited takes loan from HDFC Bank of Rs.25 Lakhs which is to be paid in 15 years. Where will you show this loan amount in balance sheet?

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 3

Loan taken from which is to be paid in 15 years is a long term borrowing.

Test: Tools Of Financial Analysis - 1 - Question 4

Loss on sale of investment is:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 4

While preparing Statement of Profit and Loss, loss on sale investment is shown under the head other expenses.

Test: Tools Of Financial Analysis - 1 - Question 5

Rent received is shown under:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 5

Rent received is shown as other income and it is added to the revenue from operations to find out the total revenue.

Test: Tools Of Financial Analysis - 1 - Question 6

An ideal Current Ratio is:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 6

An ideal current ratio is 2:1. It means a business must try to maintain its current assets twice of current liabilities.

Test: Tools Of Financial Analysis - 1 - Question 7

Liquid Ratio is also known as:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 7

Liquid Ratio is also known as 'acid test ratio' which helps in assessing the short term liquidity position of the firm.

Test: Tools Of Financial Analysis - 1 - Question 8

Quick Assets do not include:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 8

The correct option is B.

  • Quick assets are any assets that can be converted into cash on short notice.
  • These assets are a subset of the current assets classification, for they do not include inventory because it can take an excess amount of time to convert into cash.
  • Since it may be difficult to convert them into cash within a reasonable period of time, they are not a part of quick assets.
Test: Tools Of Financial Analysis - 1 - Question 9

Low ‘Working Capital Turnover Ratio’ indicates:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 9

Low working capital turnover ratio indicates that the working capital of business is under-utilized. It means firm is not using its working capital effectively and efficiently.

Test: Tools Of Financial Analysis - 1 - Question 10

Deferred Tax Asset is treated as:

Detailed Solution for Test: Tools Of Financial Analysis - 1 - Question 10

Deferred tax asset is treated as a fictitious asset because it doesn’t play any role in the firm. It is just an asset by name which cannot be realized or sold.

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