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Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Commerce MCQ


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4 Questions MCQ Test Accountancy Class 12 - Test: Analysis of Financial Statements- Assertion & Reason Type Questions

Test: Analysis of Financial Statements- Assertion & Reason Type Questions for Commerce 2024 is part of Accountancy Class 12 preparation. The Test: Analysis of Financial Statements- Assertion & Reason Type Questions questions and answers have been prepared according to the Commerce exam syllabus.The Test: Analysis of Financial Statements- Assertion & Reason Type Questions MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Analysis of Financial Statements- Assertion & Reason Type Questions below.
Solutions of Test: Analysis of Financial Statements- Assertion & Reason Type Questions questions in English are available as part of our Accountancy Class 12 for Commerce & Test: Analysis of Financial Statements- Assertion & Reason Type Questions 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: Analysis of Financial Statements- Assertion & Reason Type Questions | 4 questions in 8 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Accountancy Class 12 for Commerce Exam | Download free PDF with solutions
Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Question 1
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Comparative Balance Sheet provides information regarding progress of the business firm.

Reason (R): The Comparative Balance Sheet shows increase and decrease in absolute terms as well as in percentage in various assets, liabilities and capital.

Detailed Solution for Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Question 1
Comparative statements compare financial data of two points of time and help in deriving meaningful conclusions regarding the changes in financial position and operating results.
Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Question 2
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The analysis of financial statements does not disclose the current worth of the business.

Reason (R): Financial statements are prepared on cost principles.

Detailed Solution for Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Question 2
As the financial statements are prepared on the cost principle, its analysis does not disclose the current financial position of the company.
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Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Question 3
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Financial statements help in drawing out meaningful conclusions.

Reason (R): Financial Statements Analysis presents financial data in a simplified and understandable form.

Detailed Solution for Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Question 3

  • Financial analysis determines a company's health and stability, providing an understanding of how the company conducts its business. But it is important to know that financial statement analysis has its limitations as well.

  • Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes. External stakeholders use it to understand the overall health of an organization as well as to evaluate financial performance and business value.

Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Question 4
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Comparative statements help in deriving meaningful conclusions regarding the changes in financial position and operating results.

Reason (R): Comparative statements compare financial data of two points of time.
Detailed Solution for Test: Analysis of Financial Statements- Assertion & Reason Type Questions - Question 4
Statements showing financial data for two or more years, placed side by side to facilitate comparison are called Comparative Financial Statements.
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