The document provides a comprehensive set of MCQs related to financial statements and financial statement analysis, useful for various academic and competitive exams. It includes questions on topics such as balance sheets, profit and loss accounts, and the intended users of financial statements. Prepared by Kumar Nirmal Prasad, additional resources and contact information are provided for further learning.

1. Financial Statements MCQS
&
Financial Statement Analysis MCQs
Dynamic Tutorials and Services

2. Financial Statements MCQs and Financial
Statement Analsys MCQs are Useful for
the following Exams:
1) Class 12 Exams (CBSE, AHSEC, State Boards)
2) BBA and MBA
3) CMA, ICAI and ICSI Exam
4) Dibrugarh University, Gauhati University, Mumbai
and Pune University
5) M.Com Entrance Exams
6) All Competitive exams for Commerce stream
students

3. Prepared By: Kumar Nirmal Prasad
Address:
Near Jivan Jyoti Hospital, Tinsukia College Road
Tinsukia (Assam – 786125)
Email id:
kumarnirmalprasad@gmail.com
Official website:
https://www.dynamictutorialsandservices.org/
Contact Number:
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4. 1. Financial statements of a company include:
a) Balance Sheet.
b) Profit or Loss Account.
c) Cash Flow Statements.
d) All of the above
Ans: d) All of the above.
2. Balance Sheet shows:
a) Financial position of a Company.
b) Profit or Loss of a Company.
c) Cash flow of a Company.
d) None of the above.
Ans: a) Financial position of a Company.

5. 3. Which section of the Companies Act requires that Balance
Sheet is to be prepared in the prescribed form?
a) Sec 125
b) Sec 126
c) Sec 127
d) Sec 129
Ans: d) Sec 129.
4. Which of the following is prepared on a particular date?
a) Trading account
b) Profit & loss account
c) Balance sheet
d) All of the above
Ans: c) Balance sheet

6. 5. Which of the following are the external users of financial
statements?
a) Government
b) Banks
c) Creditors
d) All of the above
Ans: d) All of the above
6. Which of the following is not an objective of financial
statements?
a) To show company’s financial position.
b) To shown company’s operating efficiency.
c) To the effectiveness of management.
d) To determine income tax liability
Ans: d) To determine income tax liability

7. 25. Which of these are not the methods of financial statement
analysis?
a) Ratio analysis
b) Comparative analysis
c) Trend analysis
d) Capitalization method
Ans: d) Capitalization method
26. Which of the following are techniques, tools or methods of
horizontal analysis and interpretation of financial statements?
a) Ratio analysis
b) Comparative financial statements
c) Comparative income statements
d) Trend analysis
Ans: a) Ratio analysis

8. Fill in the blanks:
1. Financial Statements are the basic source of information to
interested parties.
2. The balance sheet shows the financial picture of a company at a
given time.
3. Financial Statements are prepared on the basis
of Historical value.
4. A company is required to publish its Financial Statements every
year.
5. Profit & Loss Statement shows the Operating Efficiency of the
enterprise.
6. Balance sheet shows financial Position of an enterprise.

9. State whether the following statements are true or false:
1. Financial statements are the end products of accounting
process. True
2. Financial statements are primarily directed towards the
need of owners. True
3. Facts & figures presented in financial statements may be
affected by may be personal bias. False
4. Recorded facts are based on replacement
cost. False
5. The two most useful financial statements are balance sheet
and profit loss account. True
6. Going concerns concept assumes that the enterprise
continues for a long period of time. True

10. For more than 140 MCQS relating to FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT ANALYSIS
Visit the following Link
https://www.dynamictutorialsandservices.org/2019/04/financia
l-statement-analysis-multiple.html