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Multiple Choice Part B

The document contains a multiple-choice questionnaire focused on financial statements, analysis methods, and cash management practices. It covers topics such as trend percentages, comparative financial statements, component percentages, current assets, horizontal and vertical analysis, and the implications of petty cash management. Each question presents options related to financial concepts and practices relevant to accounting and finance.

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37 views2 pages

Multiple Choice Part B

The document contains a multiple-choice questionnaire focused on financial statements, analysis methods, and cash management practices. It covers topics such as trend percentages, comparative financial statements, component percentages, current assets, horizontal and vertical analysis, and the implications of petty cash management. Each question presents options related to financial concepts and practices relevant to accounting and finance.

Uploaded by

gerald.ldg
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Multiple Choice

1. The changes in financial statement items from a base year to following years are called:
a. Money changes
b. Trend percentages
c. Component percentages
d. Ratios

2. Comparative financial statements compare the company's current statements with:


a. Those of prior periods.
b. Those of other companies in the same industry.
c. Those of the company's principal competitor.
d. The budgeted level of performance for the period.

3. Component percentages indicate the relative size of each item included in a total.
Which of the following statements is true?
a. Income statement items are expressed as a percentage of net income and balance
sheet items as a percentage of total assets.
b. Income statement items are expressed as a percentage of sales and balance sheet
items as a percentage of total assets.
c. Income statement items are expressed as a percentage of net income and balance
sheet items as a percentage of net worth.
d. Both income statement and balance sheet items are expressed as a percentage of net
worth.

4. Current assets are those assets that can be converted into cash within:
a. One year and never longer.
b. One year or the operating cycle, whichever is longer.
c. One year or the operating cycle, whichever is shorter.
d. Management's discretion.

5. The second term for Horizontal Analysis is


a. Dynamic Analysis
b. Inter-firm Analysis
c. Time-series Analysis
d. All of the above

6. Vertical analysis is also known as


a. Static analysis
b. Structural analysis
c. Cross-sectional analysis
d. All of the above

7. Which of the following is/are included in the financial statements of a business


enterprise?
a. Balance sheet
b. Profit and loss account
c. Cash flow statement
d. All of the above

8. Which of the following ratios measures the firm’s ability to meet its obligations as they
arise.
a. Activity Ratios
b. Profitability Ratios
c. Liquidity Ratios
d. Leverage Ratios

9. The entry to replenish a petty cash fund includes a credit to


a. Petty Cash.
b. Cash.
c. Freight-In.
d. Postage Expense.

10. What is the effect of not replenishing the petty cash at year-end and not making the
appropriate adjusting entry?
a. A detailed audit is essential
b. Expenses will be overstated
c. Cash will be overstated and expenses understated
d. Cash will be understated.

11. The important features of the Imprest System of handling cash of the business firms are
the following except;
a. All cash collections must be deposited intact.
b. All disbursements or payments are made thruchecks.
c. Maintenance of a petty cash fund.
d. All of these are important features of Imprest System

12. A voucher and check are prepared payable to the petty cash fund custodian upon
establishment of petty cash fund. Then, the drawer will present the check to the bank for
encashment.
a. Only statement 1 is true
b. Both are true
c. Only statement 1 is false
d. Both are false

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