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What is the process of evaluating a company’s economic and future prospects and risks?

To accurately forecast future payoffs, it is important to evaluate both the company’s business prospects and its

While calculating operating profit which will be added to net profit

Which of the following are techniques, tools or methods of analysis and interpretation of financial statements?

Which of the following statements are true?
A) Common-size balance sheet shows relative value of the various items.
B) In the common size income statement, each product is represented as a percentage of the net sales figure.
C) Common size income statements represent the various elements as a percentage of the gross profit.

Standards issued by the International Accounting Standards Board (IASB) are known as

IFRS1 First-time Adoption of International Financial Reporting Standards defines the date of transition to IFRS as

The 2010 version of the IASB Conceptual Framework was developed jointly with

The enhancing qualitative characteristics of financial information include

The elements of financial statements which relate to financial position are

Recognition is the process of

A firm has a higher quick (or acid test) ratio than the industry average, which implies

Which one of the following provides a snapshot of the financial condition of the firm at a particular time?

State which of them are true?
A) When ratios of previous years are compared with current years, they are called trend ratios.
B) Trend percentages and trend ratios are used in static analysis.
C) Reliability of financial analysis depends upon the reliability of financial data.

Which of the following statements are true?
A) Common-size balance sheet shows relative value of the various items.
B) In the common size income statement, each product is represented as a percentage of the net sales figure.
C) Common size income statements represent the various elements as a percentage of the gross profit.

Which one of the following is a summary of the profitability of the firm over a period of time such as a year?

Earnings per share shows investors the __________ earned per outstanding share of stock.

What is a measure of what the firm would have earned if it didn’t have any obligations to creditors or tax authorities?

Common size financial statements make it easier to compare firms

Stock is not included in the current assets when calculating the acid test ratio because

Comparison of the market price of the share with the earnings per share gives us which ratio?

If we want to examine the efficiency of a firm, which of the following ratios would be helpful?

What are resources controlled by the company as a result of past events and from which future economic benefits are expected to flow to the entity?

What represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity?

The capital of a company should have which of the following important characteristics?

An information uses by the investors for expecting future earnings is all recorded in

Firms will not have both relatively high profit margins and total asset turnover for long periods of time because

Which one of the following is a statement depicting change in cash position from one period to another?

Which one of the following is not a category of cash flows required to be shown on the statement of cash flows?

An increase in which one of the following will cause the operating cash flow to increase?

What refers to the cash flow that results from the firm’s ongoing, normal business activities?

Debt is a contractual obligation that

What is generally refers to items that contribute to or become part of a firm’s product output?

In services, _______________ generally refers to the tangible goods to be sold and the supplies necessary to administer the service.

A B2B exchange is a ____________ Internet marketplace that matches supply and demand by real-time auction bidding.

Costing system which omits some of journal entries in accounting system is known as

Decision model to calculate optimal quantity of inventory to be ordered is called

The balance in the Accumulated Depreciation account represents the

Depreciation is the process of allocating the cost of a plant asset over its useful life in a

When the depreciated cost of a tangible asset is higher than its recoverable amount

Which of the following best describes the higher of an asset’s net selling price and its value in use?

A piece of machinery held for continued use in the business would usually be stated in the balance sheet at

Income received or deemed to be received in India (whether accrued in or outside India) is taxable in case of

Loss from speculation business cannot be set off against profit from any non-speculation business, however

The tax expense related to profit or loss of the period is required to be presented

To the extent that tax payable exists and has not yet been paid a company will recognize

For companies that choose to adopt the Simplified Tax System (STS), tax calculations are based upon the

The financial statement that shows the financial position of an enterprise at a particular point in time is the

Assuming that none of the following have been disclosed in the financial statements, the most appropriate item for footnote disclosure is the

With respect to disclosure, the unqualified short-form audit report

For interim financial reporting, an inventory loss from a temporary market decline in the first quarter which can reasonably be expected to be restored in the fourth quarter

Footnote disclosure that summarizes information that does not meet the measurement and reporting requirements for presentation in a company’s financial statements, but is useful to informed readers, is required in order to meet the concept of

The regulation of the banking industry is of particular importance in modern economies because

Moral hazard caused by regulation can only be removed from financial transactions if

The social security committee of the House of Commons was, as a result of the Maxwell pension fund scandal, particularly critical of

The principal regulatory authority of the financial services industry in the UK is now

Given the results of the study by Clayman, you would __________ the stocks of firms with high ROEs and __________ the stocks of firms with low ROEs.

In periods of inflation, accounting depreciation is __________ relative to replacement cost and real economic income is ________.

A firm has a P/E ratio of 12 and a ROE of 13% and a market to book value of

A firm has an ROE of -2%, a debt/equity ratio of 1.0, a tax rate of 0%, and an interest rate on debt of 10%. The firm’s ROA is

If the market price of a share is £2.41 and the dividends per share is 9p, then the dividend yield is

If the EPS is 12p and the market price of the share is £3.60 then the Price/Earnings ratio would be

Which of the following would not be normally considered as ratio concerned with profitability?

If net revenue from operations of a firm are Rs.15,00,000; Gross Profit is Rs.9,00,000 and operating expenses are Rs.75,000, what will be percentage of operating income on net revenue from operations?

Total assets of a firm are Rs.20,00,000 and its fixed assets are Rs.8,00,000. What will be the percentage of fixed assets on total assets?

If net revenue from operations of a firm are Rs.1,20,000; cost of revenue from operations is Rs.66,000 and operating expenses are Rs.21,600, what will be the percentage of operating income on net revenue from operations?

If total assets of a firm are Rs.8,20,000 and its fixed assets are Rs.5,90,400, what will be the percentage of current assets on total assets?

A firm has Rs. 450 in inventory, Rs. 700 in fixed assets, Rs. 210 in accounts receivable, Rs. 50 in accounts payable, and Rs. 60 in cash. What is the amount of the current assets?

Brad’s Company has equipment with a book value of $500 that could be sold today at a 50% discount. Its inventory is valued at Rs.450 and could be sold to a competitor for that amount. The firm has Rs.100 in cash and customers owe it Rs.250. What is the accounting value of its liquid assets?

If a company changes from offering 30 days’ credit to customers to offering 50 days credit, which of the following statements is correct?

Which one of the following courses of action will increase the bank balance of a company?

Increasing the credit period from 30 to 60 days, in response to a similar action taken by all of our competitors, would likely result in

If relevant incremental costs are Rs. 5000 and relevant opportunity cost of invested capital is Rs. 2500 then relevant inventory carrying costs would be

If required rate of return is 12% and per unit cost of units purchased is Rs.35 then relevant opportunity cost of capital will be

If an average inventory is 2000 units and annual relevant carrying cost of each unit is Rs.5 then annual relevant carrying cost will be

On 1 January 2011 the books of Travelite show accrued rent payable of Rs. 250. During the year it pays rent bills amounting to Rs. 1,275 including a bill for Rs. 375 in respect of the quarter ending 31 January 2012. What is the charge in the profit and loss for rent payable for the year ending 31 December 2011?

A firm bought a new vehicle for Rs. 10,000. It is expected to be used for 5 years and then sold for Rs. 2,000. What is the annual amount of deprecation if the straight line method is used?

Which one of the following types of business face a particularly difficult problem when determining the point of revenue recognition and will often recognize revenue before all of the work necessary to generate the revenue is complete?

Pooja & Co. had a temporary difference of Rs. 45m resulting in a deferred tax liability of Rs. 15m. What is the impact of an increase in the tax rate on deferred taxes and net profit?

Differences between the carrying amounts of an entity’s net assets determined under accounting standards and accrual accounting and the tax bases of those net assets determined under the Income Tax Assessment Act, are described as

Select the two words that best fit the gaps in the following sentence. When dealing with ‘bad and doubtful debts’ a difference will arise between accounting and tax treatment of the item because under accounting principles the item is recognized when_________ while under tax law the item is written off when________.

The tax base for an asset is determined using which of the following formulae?

Chandra’s bakery business has the following account balances at 30 September 2018: ovens £38,000, inventories £4,100, trade payables £2,650, loan of £5,000 and a bank overdraft of £1,090. Chandra’s capital account as at 30 September 2018 is

‘A series of reports that are time-consuming and expensive to prepare is presented to the board of directors each month even though the reports are never used’. Which of the following qualitative characteristics or constraints is violated by this statement?

Which of the following statements is true of the qualitative characteristics of ‘understandability’ in relation to information in financial statements?

A firm has an ROA of 14%, a debt/equity ratio of 0.8, a tax rate of 35%, and the interest rate on the debt is 10%. The firm’s ROE is

FOX Company has a ratio of (total debt/total assets) that is above the industry average, and a ratio of (long term debt/equity) that is below the industry average. These ratios suggest that the firm

A firm has a (net profit / pretax profit ratio) of 0.625, a leverage ratio of 1.2, a (pretax profit / EBIT) of 0.9, an ROE of 17.82%, a current ratio of 8, and a return on sales ratio of 8%. The firm’s asset turnover is

A company had a doubtful debt provision of $14,000 at 31 December 2018. Its trade receivables at 31 December 2019 were $198,200. The company considers that receivables totaling $12,200 will not be paid and in addition planned to make a doubtful debts provision for 10% of its net receivables at 31 December 2019. What is the charge for bad and doubtful debts in the income statement for the year ended 31 December 2019?

A company’s issued share capital throughout an accounting period consists of 500,000 ordinary shares of 20p and 80,000 preference shares of £1. Profit after tax for the period is £320,000 and the preference dividend is £8,000. Basic EPS for the period is

A company’s profit after tax for the year to 30 June 2014 was £1m. The company’s issued share capital at 1 July 2013 consisted of 2,400,000 ordinary shares of 50p each. A further 300,000 shares were issued at full market price on 1 September 2013. Basic EPS for the year is

ABC Co. performed services for Client Kay in December and billed Kay $4,000 with terms of net 30 days. ABC follows the accrual basis of accounting. In January ABC received the $4,000 from Kay. In January ABC will debit Cash, since cash was received. What account should ABC credit in the January entry?

ABC Co. incurs cleanup expense of $500 on December 30. The supplier’s invoice states that the $500 is due by January 10 and ABC will pay the invoice on January 9. ABC follows the accrual basis of accounting and its accounting year ends on December 31. What is the effect of the cleanup service on the December balance sheet of ABC?

At the beginning of the year, long-term debt of a firm is Rs. 310 and total debt is Rs. 350. At the end of the year, long-term debt is Rs. 280 and total debt is Rs.370. The interest paid is Rs. 50. What is the amount of the cash flow to creditors?

Peggy Grey’s Cookies has net income of Rs.360. The firm pays out 40% of the net income to its shareholders as dividends. During the year, the company sold Rs. 80 worth of common stock. What is the cash flow to stockholders?

Thompson’s Jet Skis has operating cash flow of Rs. 218. Depreciation is Rs. 45 and interest paid is Rs. 35. A net total of Rs. 69 was paid on long-term debt. The firm spent Rs. 180 on fixed assets and increased net working capital by Rs. 38. What is the amount of the cash flow to stockholders?

Ninety-percent of Vogel Bird Seed’s total sales of Rs. 600,000 is on credit. If its year-end receivables turnover is 5, the average collection period (based on a 365-day year) and the year-end receivables are, respectively

If relevant opportunity cost of capital is Rs. 2950 and relevant carrying cost of inventory is Rs. 6700 then relevant incremental cost will be

The H&W Co. acquired a new industrial washing machine, the list price of which was Rs.52,000. The supplier allowed a trade discount of Rs.4,000 off the list price. On delivery, the cost of installing the machine in its desired location was Rs.950. According to IAS 16 – ‘Property, Plant and Equipment’, what is the cost of the machine to be capitalized?

The carrying value of furniture and fittings at 1 October 2004 was Rs.20,976, being cost of Rs.35,672 less accumulated depreciation and impairment losses of Rs.14,696. During the year, fittings costing Rs.2,972 were purchased. Depreciation is charged on the diminishing balance basis at 15% per annum. The depreciation charge, to the nearest Rs., for the year ended 30 September 2005 would be

A business has net assets at the beginning of 2010 of Rs. 101,700. The profit earned by the business during 2010 was Rs. 72,500. The owner withdrew goods for his own private use which had cost Rs. 2,500. What were the net assets at the end of 2010?

On 1 January 2016 Transport & Co. had:
PPE (book value) – Rs.230,000
PPE (tax base) – Rs.160,000
Deferred tax liability – Rs.7,500
During 2016, the government announce an unexpected increase in the level of income taxes from 30% to 40%. The amount of deferred tax liability as at 31 December 2016 is

ABC Limited adopted tax effect accounting during the current financial period. When estimating the balance date adjustments at the end of the financial period the following information was determined: Current tax liability Rs. 10 000; Deferred tax liability Rs. 12 000; Deferred tax asset Rs. 15 000. The amount that this company will recognize as current Income tax expense is

Juicy Limited has an accounting profit of $100 000. The following items are included in that profit: depreciation on motor vehicles $8 000; non-tax deductible entertainment expenses $5 000. Depreciation on motor vehicles is double the accounting rate. The tax on company income is 30%. Which of the following is the amount of taxable income for this company?