# MCQ on Class 12 Accountancy Chapter 9 Analysis of Financial Statements with Answers

Here you will find NCERT MCQ Questions for Class 12 Accountancy with Answers PDF Free Download based on the important concepts and topics given in the textbook as per CBSE new exam pattern. This may assist you to understand and check your knowledge about the chapters. Students also can take a free test of the Multiple Choice Questions of Class 12 Accountancy. Each question has four options followed by the right answer. These MCQ Questions are selected supported by the newest exam pattern as announced by CBSE.

## Q1. Which analysis is considered as dynamic :

(A) Horizontal Analysis
(B) Vertical Analysis
(C) Internal Analysis
(D) External Analysis

(A) Horizontal Analysis

## Q2. Which analysis is considered as static :

(A) Horizontal Analysis
(B) Vertical Analysis
(C) Internal Analysis
(D) External Analysis

(B) Vertical Analysis

## Q3. Which analysis is based only on one year’s data :

(A) Cash Flow Statement
(B) Dividend Analysis
(C) Vertical Analysis
(D) Horizontal Analysis

(C) Vertical Analysis

## Q4. Main objective of analysis of financial statements is

(A) To know the financial strength
(B) To make a comparative study with other firms
(C) To know the efficiency of management
(D) All of the Above

(D) All of the Above

## Q5. Analysis of Financial Statements is significant:

(A) For Creditors
(B) For Managers
(C) For Employees
(D) For all of the above

(D) For all of the above

## Q6. Financial analysis becomes significant because it :

(A) Ignores price level changes
(B) Measures the efficiency of business
(C) Lacks qualitative analysis
(D) Is effected by personal bias

(B) Measures the efficiency of business

## Q7. When bad position of the business is tried to be depicted as good, it is known as ………………………..

(A) Personal Bias
(B) Price Level Changes
(C) Window Dressing
(D) All of the Above

(C) Window Dressing

## Q8. Which of the following statements are true

a) All of the options
b) External analysis depends entirely on issued financial statements
c) Interpretation and analysis both are different
d) Financial analysis covers interpretation

a) All of the options

## Q9. Importance of Comparative Statement is

a) Indicate the trend with respect to the previous year
b) Make the data simple and more understandable
c) All of the options
d) compare the firm performance with the performance of other firm in the same business

c) All of the options

## Q10. Which one of the following is not a method/tool of analysis of financial statements?

a. Accounting Ratios
b. Break Even Point
c. Statements of Receipts and Payments
d. Fund Flow Statement

c. Statements of Receipts and Payments

## Q11. Feature of financial analysis is to present the data contained in financial statements in

a. Easy form
b. Convenient and rational groups
c. Comparable form
d. All of the above

d. All of the above

## Q12. The financial statements of a business enterprise include :

(a) Balance sheet
(b) Statement of Profit and loss account
(c) Cash flow statement
(d) All the above

(d) All the above

## Q13. Which of the following is the objective of comparative statements?

a. To make the data simpler and understandable
b. To indicate the trend
c.To help in forecasting
d. All of the above

d. All of the above

## Q14. When financial statements of several years are analysed, it is termed as

a) None of the options
b) Horizontal analysis
c) Current ratios
d) Vertical analysis

d) Vertical analysis

## Q15. Financial analysis can be done with which of the following tool?

(a) Ratio Analysis
(b) Cash Flow Statement
(c) Comparative Statements
(d) All of the above

(d) All of the above

## Q16. Analysis of financial statements for two or more years is known as

(a) Horizontal analysis
(b) External analysis
(c) Vertical analysis
(d) Internal analysis

(a) Horizontal analysis

## Q17. Which of the following is not an objective of financial statement analysis?

(a) Efficiency of the Management
(b) Price Level Changes
(c) Profitability of the Enterprise
(d) Solvency of the Enterprise

(b) Price Level Changes

(a) Management
(b) Debtor
(c) Creditor
(d) Investor

(b) Debtor

## Q19. Who has the interest in long-term solvency position of the firm?

(a) Creditors
(b) Bankers providing overdraft facilities
(c) Financial Institutions
(d) Short-term money lenders

(c) Financial Institutions

## Q20. Which of the following is not a limitation in the analysis of financial statements?

(a) Ignores Price Level Changes
(b) Window Dressing
(c) Financial performance of the firm
(d) Bias of the Analyst

(c) Financial performance of the firm

Use the above-provided NCERT MCQ Questions for Class 12 Accountancy with Answers Pdf free download. We hope the given NCERT MCQ Questions for Class 12 Accountancy PDF Free Download will definitely yield fruitful results. If you have any queries regarding The CBSE Class 12 Accountancy MCQs Multiple Choice Questions with Answers, drop a comment below and we will get back to you soon.