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  1. Current
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  3. Answered
  4. Correct
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  1. Question 1 of 104
    1. Question

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

    Correct
    Incorrect
  2. Question 2 of 104
    2. Question

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

    Correct
    Incorrect
  3. Question 3 of 104
    3. Question

    While calculating operating profit which will be added to net profit

    Correct
    Incorrect
  4. Question 4 of 104
    4. Question

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

    Correct
    Incorrect
  5. Question 5 of 104
    5. Question

    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.

    Correct
    Incorrect
  6. Question 6 of 104
    6. Question

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

    Correct
    Incorrect
  7. Question 7 of 104
    7. Question

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

    Correct
    Incorrect
  8. Question 8 of 104
    8. Question

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

    Correct
    Incorrect
  9. Question 9 of 104
    9. Question

    The enhancing qualitative characteristics of financial information include

    Correct
    Incorrect
  10. Question 10 of 104
    10. Question

    The elements of financial statements which relate to financial position are

    Correct
    Incorrect
  11. Question 11 of 104
    11. Question

    Recognition is the process of

    Correct
    Incorrect
  12. Question 12 of 104
    12. Question

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

    Correct
    Incorrect
  13. Question 13 of 104
    13. Question

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

    Correct
    Incorrect
  14. Question 14 of 104
    14. Question

    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.

    Correct
    Incorrect
  15. Question 15 of 104
    15. Question

    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.

    Correct
    Incorrect
  16. Question 16 of 104
    16. Question

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

    Correct
    Incorrect
  17. Question 17 of 104
    17. Question

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

    Correct
    Incorrect
  18. Question 18 of 104
    18. Question

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

    Correct
    Incorrect
  19. Question 19 of 104
    19. Question

    Common size financial statements make it easier to compare firms

    Correct
    Incorrect
  20. Question 20 of 104
    20. Question

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

    Correct
    Incorrect
  21. Question 21 of 104
    21. Question

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

    Correct
    Incorrect
  22. Question 22 of 104
    22. Question

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

    Correct
    Incorrect
  23. Question 23 of 104
    23. Question

    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?

    Correct
    Incorrect
  24. Question 24 of 104
    24. Question

    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?

    Correct
    Incorrect
  25. Question 25 of 104
    25. Question

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

    Correct
    Incorrect
  26. Question 26 of 104
    26. Question

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

    Correct
    Incorrect
  27. Question 27 of 104
    27. Question

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

    Correct
    Incorrect
  28. Question 28 of 104
    28. Question

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

    Correct
    Incorrect
  29. Question 29 of 104
    29. Question

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

    Correct
    Incorrect
  30. Question 30 of 104
    30. Question

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

    Correct
    Incorrect
  31. Question 31 of 104
    31. Question

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

    Correct
    Incorrect
  32. Question 32 of 104
    32. Question

    Debt is a contractual obligation that

    Correct
    Incorrect
  33. Question 33 of 104
    33. Question

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

    Correct
    Incorrect
  34. Question 34 of 104
    34. Question

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

    Correct
    Incorrect
  35. Question 35 of 104
    35. Question

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

    Correct
    Incorrect
  36. Question 36 of 104
    36. Question

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

    Correct
    Incorrect
  37. Question 37 of 104
    37. Question

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

    Correct
    Incorrect
  38. Question 38 of 104
    38. Question

    The balance in the Accumulated Depreciation account represents the

    Correct
    Incorrect
  39. Question 39 of 104
    39. Question

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

    Correct
    Incorrect
  40. Question 40 of 104
    40. Question

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

    Correct
    Incorrect
  41. Question 41 of 104
    41. Question

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

    Correct
    Incorrect
  42. Question 42 of 104
    42. Question

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

    Correct
    Incorrect
  43. Question 43 of 104
    43. Question

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

    Correct
    Incorrect
  44. Question 44 of 104
    44. Question

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

    Correct
    Incorrect
  45. Question 45 of 104
    45. Question

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

    Correct
    Incorrect
  46. Question 46 of 104
    46. Question

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

    Correct
    Incorrect
  47. Question 47 of 104
    47. Question

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

    Correct
    Incorrect
  48. Question 48 of 104
    48. Question

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

    Correct
    Incorrect
  49. Question 49 of 104
    49. Question

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

    Correct
    Incorrect
  50. Question 50 of 104
    50. Question

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

    Correct
    Incorrect
  51. Question 51 of 104
    51. Question

    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

    Correct
    Incorrect
  52. Question 52 of 104
    52. Question

    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

    Correct
    Incorrect
  53. Question 53 of 104
    53. Question

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

    Correct
    Incorrect
  54. Question 54 of 104
    54. Question

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

    Correct
    Incorrect
  55. Question 55 of 104
    55. Question

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

    Correct
    Incorrect
  56. Question 56 of 104
    56. Question

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

    Correct
    Incorrect
  57. Question 57 of 104
    57. Question

    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.

    Correct
    Incorrect
  58. Question 58 of 104
    58. Question

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

    Correct
    Incorrect
  59. Question 59 of 104
    59. Question

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

    Correct
    Incorrect
  60. Question 60 of 104
    60. Question

    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

    Correct
    Incorrect
  61. Question 61 of 104
    61. Question

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

    Correct
    Incorrect
  62. Question 62 of 104
    62. Question

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

    Correct
    Incorrect
  63. Question 63 of 104
    63. Question

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

    Correct
    Incorrect
  64. Question 64 of 104
    64. Question

    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?

    Correct
    Incorrect
  65. Question 65 of 104
    65. Question

    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?

    Correct
    Incorrect
  66. Question 66 of 104
    66. Question

    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?

    Correct
    Incorrect
  67. Question 67 of 104
    67. Question

    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?

    Correct
    Incorrect
  68. Question 68 of 104
    68. Question

    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?

    Correct
    Incorrect
  69. Question 69 of 104
    69. Question

    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?

    Correct
    Incorrect
  70. Question 70 of 104
    70. Question

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

    Correct
    Incorrect
  71. Question 71 of 104
    71. Question

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

    Correct
    Incorrect
  72. Question 72 of 104
    72. Question

    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

    Correct
    Incorrect
  73. Question 73 of 104
    73. Question

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

    Correct
    Incorrect
  74. Question 74 of 104
    74. Question

    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

    Correct
    Incorrect
  75. Question 75 of 104
    75. Question

    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

    Correct
    Incorrect
  76. Question 76 of 104
    76. Question

    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?

    Correct
    Incorrect
  77. Question 77 of 104
    77. Question

    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?

    Correct
    Incorrect
  78. Question 78 of 104
    78. Question

    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?

    Correct
    Incorrect
  79. Question 79 of 104
    79. Question

    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?

    Correct
    Incorrect
  80. Question 80 of 104
    80. Question

    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

    Correct
    Incorrect
  81. Question 81 of 104
    81. Question

    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________.

    Correct
    Incorrect
  82. Question 82 of 104
    82. Question

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

    Correct
    Incorrect
  83. Question 83 of 104
    83. Question

    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

    Correct
    Incorrect
  84. Question 84 of 104
    84. Question

    ‘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?

    Correct
    Incorrect
  85. Question 85 of 104
    85. Question

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

    Correct
    Incorrect
  86. Question 86 of 104
    86. Question

    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

    Correct
    Incorrect
  87. Question 87 of 104
    87. Question

    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

    Correct
    Incorrect
  88. Question 88 of 104
    88. Question

    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

    Correct
    Incorrect
  89. Question 89 of 104
    89. Question

    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?

    Correct
    Incorrect
  90. Question 90 of 104
    90. Question

    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

    Correct
    Incorrect
  91. Question 91 of 104
    91. Question

    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

    Correct
    Incorrect
  92. Question 92 of 104
    92. Question

    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?

    Correct
    Incorrect
  93. Question 93 of 104
    93. Question

    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?

    Correct
    Incorrect
  94. Question 94 of 104
    94. Question

    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?

    Correct
    Incorrect
  95. Question 95 of 104
    95. Question

    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?

    Correct
    Incorrect
  96. Question 96 of 104
    96. Question

    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?

    Correct
    Incorrect
  97. Question 97 of 104
    97. Question

    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

    Correct
    Incorrect
  98. Question 98 of 104
    98. Question

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

    Correct
    Incorrect
  99. Question 99 of 104
    99. Question

    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?

    Correct
    Incorrect
  100. Question 100 of 104
    100. Question

    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

    Correct
    Incorrect
  101. Question 101 of 104
    101. Question

    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?

    Correct
    Incorrect
  102. Question 102 of 104
    102. Question

    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

    Correct
    Incorrect
  103. Question 103 of 104
    103. Question

    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

    Correct
    Incorrect
  104. Question 104 of 104
    104. Question

    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?

    Correct
    Incorrect

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