A:-Preparing accounting statements, Analysis of financial statements, Comparison of results and Discussions on firm's
performance

B:-Recognition of events and transactions, Measurement of transactions and events presentation of transactions and
events and Disclosure requirements
C:-Both 1 and 2
D:-None of the above
Correct Answer:- Option-B
Question18:-A company receives loan from a bank. What is the effect on the accounting equation?
A:-Asset increases, liability increase and owner's equity remains unchanged
B:-Asset decrease, liability increase and owner's equity remains unchanged
C:-Asset increases, liability decrease and owner's equity remains unchanged
D:-Asset and liability decreases and owner's equity remains unchanged
Correct Answer:- Option-A
Question19:-Presently, current assets and current liabilities of a company are Rs. 20 lakh and Rs. 10 lakh respectively. On
purchase of a machinery worth Rs. 5 lakh on cash, current ratio of the company will become:
4:21
B:-3:2
602
D:-4:3
Correct Answer:- Option-B
Question20:-Based on DuPont system, what will be the company's rate of return on equity, if the (a) equity turnover is 4.2
times, (b) net profit margin is 5.5%, (c) total assets turnover ratio is 2.0 times and (d) dividend pay-out ratio is 30%
۸-6
B:-23.1%
C:-24%
D:-22%
Correct Answer:- Option-B
Question21:-A three months debtor collection period implies that the debtor turnover ratio is
A:-2 times
B:-60 times
-4 times
D:-6 times
Correct Answer:- Option-C
Question22:-A statement which indicates the relationship of different items of a financial statement with a common item by
expressing each item as a percentage of that common item is called
A:-Common size statement
-~Comparative statement
C:-Statement of accounts
D:-Cash flow statement
Correct Answer:- Option-A
Question23:-The financial statement in relation to a company includes:
A:-Balance sheet and a profit and loss account for the financial year only
Trial balance, Balance sheet and a profit and loss account for the financial year
C:-(a) a balance sheet as at the end of the financial year
(b) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure
account for the financial year; and
(c) Cash flow statement for the financial year
D:-(a) a balance sheet as at the end of the financial year
(b) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure
account for the financial year;
(c) cash flow statement for the financial year;
(d) a statement of changes in equity , if applicable; and
(e) any explanatory note annexed to, or forming part of, any document referred to in points (a) to (d) above
Correct Answer:- Option-D