Financial Statements Analysis & Reporting

Assignment IV

1) Stock in trade is a
a) Fixed asset
b) Fictitious asset
c) Intangible asset
d) Current asset
2) Assets were easily convertible into cash are
a) Current assets
b) Fixed assets
c) Liquid assets
d) Floating assets
3) Outstanding wages is an item of
a) Current asset
b) Current liability
c) Non-current asset
d) Non-current liability
4) Profit and loss account of business shows the
a) Balances of all accounts
b) Gross profit earned
c) Net profit earned
d) Capital employed in business
5) Balance sheet shows the
a) Financial position of a business
b) Balances of all accounts
c) Net profit earned during a period
d) None of these
6) Which of the following headings is correct
a) AB Sales Co.
Income Statement as on 31st Dec. 2015
b) AB Sales Co.
Income Statement for the year ended 31st Dec. 2015
c) AB Sales Co.
Income Statement, 31st Dec. 2015
d) None of these
7) Which of the following headings is correct?
a) AB Sales Co.
Balance Sheet as on 31st Dec. 2016
b) AB Sales Co.
Balance Sheet for the year ended 31st Dec. 2016
c) AB Sales Co.
 Balance Sheet 31st Dec. 2016
d) None of these
8) A business has assets of Rs. 44,312 and owner’s equity Rs. 13,210. What is the amount
of liabilities?
a) Rs. 31,102
b) Rs. 57,522
c) Rs. 44,312
d) None of these
9) Liabilities of a business are Rs. 11,220 and owner’s equity is Rs. 15,000. The assets of
the business will be
a) Rs. 11,220
b) Rs. 3,870
c) Rs. 15,000
d) None of these
10) Assets of a business are Rs. 21,315 and liabilities Rs. 4,120. What is the amount of
owner’s equity
a) Rs. 21,315
b) Rs. 17,195
c) Rs. 25,435
d) Rs. 4,120
11) Purchase of office equipment results in
a) Increase in capital
b) Decrease in liabilities
c) Increase in assets
d) Decrease in capital
12) Investment by owner results in
a) Increase in capital and decrease in liability
b) Increase in capital and increase in liability
c) Increase in capital and decrease in asset
d) Increase in capital and increase in asset
13) Collection of accounts receivable results in
a) Increase in capital and increase in asset
b) Increase in liability and increase in asset
c) Decrease in asset and increase in asset
d) Decrease in liability and increase in asset
14) Income earned to be collected, results in
a) Increase in liability and increase in capital
b) Decrease in liability and increase in capital
c) Increase in asset and increase in liability
d) Increase in capital and increase in asset
15) Income earned and collected results in
a) Increase in asset and increase in capital
 b) Increase in asset and decrease in capital
c) Increase in asset and decrease in asset
d) Decrease in capital and increase in liability

Answer Key
Question 1 Question 2 Question 3 Question 4
d c b c
Question 5 Question 6 Question 7 Question 8
a b a a
Question 9 Question 10 Question 11 Question 12
d b c d
Question 13 Question 14 Question 15
c d a