Tag: trend analysis

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Questions Related to trend analysis

Multiple choice trend analysis tools for financial analysis analysis of financial statements financial statement analysis accountancy

Select the correct statement.

  1. General reserve is created out of divisible profits

  2. General reserve is used for some specified purposes

  3. Revenue reserve include capital reverse also

  4. All the three
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

General reserve is created out of divisible profits. This is the only true statement. General reserve is created to meet any future uncertainties, they are basically the retained earnings of the company.  

Multiple choice trend analysis tools for financial analysis analysis of financial statements financial statement analysis accountancy

Which of the following statements are false?
A) When all the figures in a balance sheet are stated as percentage of the total, it is termed as horizontal analysis. 
B) When financial statements of several years are analyzed, it is termed as vertical analysis. 
C) Vertical Analysis is also termed as dynamic analysis. 

  1. Both A and B

  2. Both A and C

  3. Both B and C

  4. A, B and C
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Statements are A and C are false. 
A) False. When all figures in the balance sheet are stated as percentage of the total, its termed as vertical or common-size analysis. 
C) False. Horizontal analysis is termed as dynamic analysis. Vertical analysis is done to review and analysis the financial statements for a year only and therefore it is also called static analysis.
Multiple choice trend analysis tools for financial analysis analysis of financial statements financial statement analysis accountancy

A company discloses the following information in relation to its receivables in the notes to its financial statements.
Gross amount receivable - Rs. 4,800
Provision for doubtful debts - Rs. 360
Net Carrying amount of receivable - Rs. 4,400
Which one of the following is the maximum credit risk that it must also disclose in the notes to comply with IFRS 7?

  1. Rs. 360

  2. Rs. 4,400

  3. Rs. 4,800

  4. No disclosure is required
Reveal answer Fill a bubble to check yourself
D Correct answer