Financial Statements - MCQs with answers1. The term ‘Financial Statement’ covers
a) Profit & Loss Statement
b) Balance sheet and Profit & Loss Statement appropriation account
c) Profit & Loss Statement and Balance sheet
d) All of above are falseView Answer / Hide Answer
2. The form of balance sheet is
ANSWER: c) Profit & Loss Statement and Balance sheet
c) Horizontal and vertical
d) Horizontal or verticalView Answer / Hide Answer
3. The term current asset doesn’t cover
ANSWER: d) Horizontal or vertical
d) Prepaid expensesView Answer / Hide Answer4. P&L statement is also known as
a) Statement of operations
b) Statement of income
c) Statement of earnings
d) All of the aboveView Answer / Hide Answer
5. Which of the following is true about financial statements?
ANSWER: b) Statement of income
A) Financial statement gives a summary of accounts.
B) Financial statements can be stated as recorded facts.
a) Only A
b) Only B
c) Both A and B
d) None of the aboveView Answer / Hide Answer6. The statement of financial position and the balance sheet are synonyms.
b) FalseView Answer / Hide Answer7. Schedules attached with the balance sheet forms a part of the financial statements.
b) FalseView Answer / Hide Answer8. Which of the following statements are true?
A) Financial statements are only interim report.
B) Financial statements are also known as annual records.
C) Financial statements are historic.
a) Both A and B
b) Both A and C
c) Both B and C
d) A, B, CView Answer / Hide Answer9. Certain assumptions are essential to prepare financial statements.
b) FalseView Answer / Hide Answer