MCQ SERIES : ACCOUNTANCY 2024-25

CHAPTER.8. ANALYSIS OF FINANCIAL STATEMENTS

INSTRUCTIONS: You are required to read, write and learn all the questions
below and answer them with explanation( first try yourself ans are given at the
end of exercise)

Financial Statement Analysis MCQs – Question 1: –

Following is the information available from the records of BEE Ltd

Particulars 2008 2007

Revenue from 18000 15000
Operations 00 00
10800 97000
Expenses
00 0
25000 16500
Other Income
0 0

Absolute Change and Percentage Change in Revenue from Operations is:

a) 1800000 and 20 %
b) 300000 and 20 %
c) 1500000 and 20 %
d) None of the above

Financial Statement Analysis MCQs – Question 2: –

Following is the information available from the records of O Ltd

Particulars 2008 2007

Revenue from 30000 18000
Operations 00 00
21000 14000
Expenses
00 00
25000 20000
Other Income
0 0

Absolute Change and Percentage Change in Expenses is:

a) 2100000 and 50 %
b) 1400000 and 50 %
c) 700000 and 50 %
d) None of the above

Financial Statement Analysis MCQs – Question 3: –

Following is the information available from the records of DEF Ltd

Particulars 2008 2007
Revenue from 20000 15000
Operations 00 00
15500 10500
Expenses
00 00
60000 40000
Other Income
0 0

Absolute Change and Percentage Change in Other income is:

a) 200000 and 50 %
b) 600000 and 50 %
c) 400000 and 50 %
d) None of the above

MCQs on Financial Statement Analysis – Question 4: –

Following is the information available from the records of Two Ltd

Particulars 2008 2007

Revenue from 16000 10000
Operations 00 00
90000 60000
Expenses
0 0
27000 20000
Other Income
0 0

Profit before tax is :

a) 2007 – 600000
2008 – 970000

b) 2007 – 1200000
2008 – 1870000

c) 2007 – 1000000
2008 – 1600000

d) None of the above

MCQs on Financial Statement Analysis – Question 5: –

Following is the information available from the records of MANY LTD

Particulars 2008 2007
Revenue from 25000 20000
Operations 00 00
20000 16000
Expenses
00 00
40000 32000
Other Income
0 0

Rate of Tax is 40 %

Profit after tax is :

a) 2007 – 2320000
2008 – 2900000

b) 2007 – 432000
2008 – 540000

c) 2007 – 2000000
2008 – 2500000

d) None of the above

MCQs on Financial Statement Analysis – Question 6: –

Following is the information provided by B LTD

Particulars 2008 2007

Revenue from 70000 50000
Operations 00 00
35000 25000
Purchase of Stock
00 00
50000 25000
Other Expenses
0 0
Rate of Income Tax 30% 30%

Purchase of Stock Percentage to Revenue from Operations is:

a) 2007 – 50
2008 – 50

b) 2007 – 40
2008 – 60

c) 2007 – 45
2008 – 65

d) None of the above

MCQs on Financial Statement Analysis – Question 7: –

Following is the information provided by B LTD

Particulars 2008 2007

Revenue from 5000 40000
Operations 00 0
3500 28000
Purchase of Stock
00 0
2000 10000
Other Expenses
00 0
Rate of Income Tax 40% 40%

Other Expenses Percentage to Revenue from Operations is:

a) 2007 – 28
2008 – 46

b) 2007 – 30
2008 – 45

c) 2007 – 25
2008 – 40

d) None of the above

Financial Statement Analysis MCQs – Question 8: –

Following is the information provided by B LTD

Particulars 2008 2007

Revenue from 7500 68000
Operations 00 0
6500 50000
Purchase of Stock
00 0
8500
Other Expenses 50000
0
Rate of Income Tax 30% 30%

Profit after Tax for year 2007 is

a) 10500
b) 130000
c) 91000
d) None of the above

Financial Statement Analysis MCQs – Question 9: –

Following is the information provided by B LTD

Absolute Change and Percentage Change in share capital is

a) Absolute Change – 1030000, Percentage Change – 28

b) Absolute Change – 1000000, Percentage Change – 25
c) Absolute Change – 980000, Percentage Change – 23
d) None of the above

Financial Statement Analysis MCQs – Question 10: –

Following is the Balance sheet of BB Ltd

Absolute Change and Percentage Change in Reserve and Surplus is:

a) Absolute Change -170000, Percentage Change -17

b) Absolute Change -200000, Percentage Change -20
c) Absolute Change -220000, Percentage Change -22
d) None of the above

Financial Statement Analysis MCQs – Question 11: –

Following is the Balance sheet of C Ltd

Absolute Change and Percentage Change in Long-term Borrowings is:

a) Absolute Change 100000, Percentage Change 25

b) Absolute Change 70000, Percentage Change 23
c) Absolute Change 90000, Percentage Change 21
d) None of the above

MCQs on Financial Statement Analysis – Question 12: –

Following is the Balance sheet of B Ltd

Absolute Change and Percentage Change in Fixed Assets(Tangible) is:

a) Absolute Change – 250000, Percentage Change – 47

b) Absolute Change – 220000, Percentage Change – 44
c) Absolute Change – 200000, Percentage Change – 42
d) None of the above

MCQs on Financial Statement Analysis – Question 13: –

Following is the balance sheet of B Ltd

Fixed Assets(Tangible) Percentage of Balance Sheet Total for 2007 will be:

a) 30
b) 26
c) 28
d) None of the above

Financial Statement Analysis MCQs

Answers and Explanations
Financial Statement Analysis MCQs – Explanation 1: –

Comparative Statement of Profit and Loss

Absolute Percentage
Particulars 2007 2008
Change Change %
A B C = (B-A) D = C/A x 100
Revenue from 15000 18000 300000 20
Operations 00 00

Absolute Change = Current year balance – Previous year balance

Absolute Change = 1800000 – 1500000 = 300000

Percentage Change % = (Absolute Change/ Previous Year Balance) X 100

Percentage Change % = (300000/1500000) X 100

= 20 %

Correct Answer – b) 300000 and 20 %

Explanation 2: –

Particular Absolute Percentage

2007 2008
s Change Change %
A B C = (B-A) D = C/A x 100
14000 21000
Expenses 700000 50
00 00

Absolute Change = Current year balance – Previous year balance

Absolute Change = 2100000 – 1400000 = 700000

Percentage Change % = (Absolute change/Previous year balance) x 100

Percentage Change % = (700000/1400000) X 100

= 50 %

Correct Answer – c) 700000 and 50 %

Financial Statement Analysis MCQs – Explanation 3: –

Comparative Statement of Profit and Loss

Particular Absolute Percentage

2007 2008
s Change Change %
A B C = (B-A) D = C/A x 100
4000 6000
Expenses 200000 50
00 00

Absolute Change = Current year balance – Previous year balance

Absolute Change = 600000 – 400000 = 200000

Percentage Change % = (Absolute change/Previous year balance) x 100

Percentage Change % = (200000/400000) X 100

= 50 %

Correct Answer – a) 200000 and 50 %

Explanation 4: –

Comparative Statement of Profit and Loss

Absolute
Particulars 2007 2008
Change
A B C = (B-A)
Revenue for 10000 16000
600000
Operations 00 00
20000 27000
Other Income 70000
0 0
12000 18700
Total Revenue 670000
00 00
60000 90000
Expenses 300000
0 0
60000 97000
Profit before Tax 370000
0 0

Absolute Change = Current year balance – Previous year balance

Revenue from Operations = 1600000 – 1000000 = 600000

Other Income = 270000 – 200000 = 70000

Expenses = 900000 – 600000 = 300000

Percentage Change = (Absolute change/Previous year balance) x 100

Revenue for Operations = (600000/1000000) X 100 = 60

Other Income = (70000/200000) X 100 = 35

Expenses = (300000/600000) X 100 = 50

Correct Answer – a) 2007 – 600000, 2008 – 970000

Financial Statement Analysis MCQs – Explanation 5: –

Comparative Statement of Profit and Loss

Absolute
Particulars 2007 2008
Change
A B C = (B-A)
Revenue for 20000 25000
500000
Operations 00 00
32000 40000
Other Income 80000
0 0
23200 29000
Total Revenue 580000
00 00
16000 20000
Expenses 400000
00 00
72000 90000
Profit before Tax 180000
0 0
28800 36000
Less: Tax 40% 72000
0 0
43200 54000
Profit after Tax 108000
0 0

Absolute Change = Current year balance – Previous year balance

Revenue from Operations = 2500000 – 2000000 = 500000

Other Income = 400000 – 320000 = 80000

Expenses = 2000000 – 1600000 = 400000

Percentage Change = (Absolute change/Previous year balance) x 100

Revenue for Operations = (500000/2000000) X 100 = 25

Other Income = (80000/320000) X 100 = 25

Expenses = (400000/1600000) X 100 = 25

Correct Answer –

b) 2007 – 432000
2008 – 540000

Explanation 6: –
Percentage of Revenue from Operations (Net Sales) = (Amount of particular expense
in that year/Total Revenue in that year) x 100

Purchase of Stock

2007 = (2500000/5000000) x 100 = 50

2008 = (3500000/7000000) x 100 = 50

Correct Answer – a) 2007 – 50, 2008 – 50

Explanation 7: –

Percentage of Revenue from Operations(Net Sales) = (Amount of particular expense

in that year/Total revenue in the year) x 100

Other Expenses

2007 = (100000/400000) x 100 = 25

2008 = (200000/500000) x 100 = 40

Correct Answer – c) 2007 – 25, 2008 – 40

Financial Statement Analysis MCQs – Explanation 8: –

Particulars 2007 2008

Revenue for 6800 75000
Operations 00 0
Expenses
5000 65000
Purchase of Stock
00 0
5000
Other Expenses 85000
0
5500 7350
Total Expenses
00 00
1300 1500
Profit before Tax
00 0
3900
Less: Income Tax 4500
0
9100 1050
Profit after Tax
0 0

Correct Answer – c) 91000

Explanation 9: –

2006 2007 Absolute Percentage

 Change Change
Share 40000 50000
1000000 25
Capital 00 00

Absolute Change = Current year’s figure – Previous year’s figure

= 5000000 – 4000000

= 1000000

Percentage Change = (Absolute Change/Amount of Previous Year) x 100

= (1000000/4000000) x 100

= 25 %

Correct Answer – b) Absolute Change – 1000000, Percentage Change – 25

Explanation 10: –

Absolute Percentage
2006 2007
Change Change
Reserve and 10000 8000
-200000 -20
Surplus 00 00

Absolute Change = Current year’s figure – Previous year’s figure

= 800000 – 1000000

= -200000

Percentage Change = (Absolute Change/Amount of Previous Year) x 100

= (−200000/1000000) x 100

= -20

Correct Answer – b) Absolute Change -200000, Percentage Change -20

Explanation 11: –

Comparative Balance Sheet

Absolute Percentage
2006 2007
Change Change
Long Term 4000 5000
100000 25
Borrowings 00 00

Absolute Change = Current year’s figure – Previous year’s figure

= 500000 – 400000

= 100000

Percentage Change = (Absolute Change/Amount of previous year) x 100

= (100000/400000) x 100

= 25%

Correct Answer – a) Absolute Change 100000, Percentage Change 25

Financial Statement Analysis MCQs – Explanation 12: –

Comparative Balance Sheet

Absolute Percentage
2006 2007
Change Change
Fixed Assets 5000 7200
220000 44
(Tangible) 00 00

Absolute Change = Current year’s figure – Previous year’s figure

= 720000 – 500000

= 220000

Percentage Change = (Absolute Change/Amount of previous year) x 100

= (220000/500000) x 100

= 44

Correct Answer – b) Absolute Change – 220000, Percentage Change – 44

Financial Statement Analysis MCQs – Explanation 13: –

Extract of Common size Balance Sheet

Particulars 2007 Percentage of Balance sheet

 Total
Fixed Assets 9000
30
(Tangible) 00

Fixed Assets(Tangible) Percentage of Balance Sheet Total 2007

= (Balance of Fixed Assets(Tangible) in the year/Total of Balance Sheet in the year) x

100

= (900000/3000000) x 100

= 30

Correct Answer – a) 30