Accounting Analysis

Question 1

Which of the below would NOT be on an income statement?

Answer 1

Trade payables

Question 2

Which of the following is the key difference between the current ratio and the quick ratio?

Answer 2

Inventory

Question 3

Which of the following is NOT part of shareholders’ funds?

Answer 3

Investments in associates

Question 4

The best definition of enterprise cash flow would be:

Answer 4

Cash flow to all providers of finance

Question 5

What would you not expect to find under tangible non-current assets?

Answer 5

Work-in-progress

Question 6

Which of the following would NOT be found in an income statement?

Answer 6

Deferred tax liability

Question 7

Which of the following has taken into consideration the repayment of debentures?

Answer 7

Equity cash flow

Question 8

Which of the following would not be included within shareholders funds?

Answer 8

Warrants

Question 9

Which of the following is not part of shareholders’ funds?

Answer 9

Authorised share capital

Question 10

What would you not expect to find under tangible non-current assets?

Answer 10

Work-in-progress

Question 11

What is the effect of ‘capitalisation’ of expenditure on the statement of financial position?

Answer 11

Cash decreases and non-current assets increase

Question 12

Return on capital employed

Answer 12

Return on capital employed = profit before interest and tax / capital employed.

Question 13

Which of the following would appear on a cash flow statement?

Answer 13

Acquisitions and disposals

Question 14

Return on equity

Answer 14

ROE = Profit to ordinary shareholders / shareholder funds

Question 15

Where on a company’s statement of financial position would you find the share premium account?

Answer 15

Capital and reserves

Question 16

On the statement of financial position, which one below would not appear as intangible non current assets?

Answer 16

Revaluation reserve

Question 17

The gross profit margin will take into account which of the following?

Answer 17

Only the cost of goods

Question 18

The company has produced its financial statements and have enclosed additional disclosures in the notes. Which of the following will LEAST likely appear in these notes?

Answer 18

The statement of investment principles

Question 19

Which would you NOT find as a current liability in a statement of financial position?

Answer 19

Interest paid

Question 20

Which one of the following would be classified as capital expenditure?

Answer 20

The purchase of computers for new work premises

Question 21

Where in the financial statements would you find tax payable?

Answer 21

Statement of financial position

Question 22

When would a company disclose a minority interest in the statement of financial position?

Answer 22

A subsidiary company is not fully owned by the group

Question 23

Any increase in inventory

Answer 23

deduct from trading profit, the decrease in receivables: add to trading profit and the Increase in payables: add to trading profit.

Question 24

Which of the following would usually be found under non-current assets in a statement of financial position?

Answer 24

Computers

Land and buildings

Question 25

All of the following are intangible non-current assets except:

Answer 25

Share premium

Question 26

The current ratio is typically used to measure which one of the following within a company?

Answer 26

Liquidity

Question 27

All of the following are current assets except:

Answer 27

Payables

Question 28

In a statement of financial position (balance sheet), prepayments come under which category?

Answer 28

Current assets

Question 29

Which of the following items would be found in a cash flow statement?

Answer 29

Equity dividends paid

Question 30

What is net asset value per ordinary share?

Answer 30

(Assets - liabilities) / number of ordinary shares

Question 31

Which of the following will increase the shareholder's funds of a company?

Answer 31

Rights issue | Offer for subscription

Question 32

The role of the auditor includes:

Answer 32

To report whether the accounts have been properly prepared in accordance with the accounting policies

Question 33

Which of the following would best describe enterprise cash flow?

Answer 33

Free cash flow before considering any financing costs

Question 34

Which of the following does NOT appear in the cash flow statement?

Answer 34

Net assets

Question 35

Which of the following is not a heading in the cash flow statement?

Answer 35

Dividends paid and proposed

Question 36

All of the following are current assets, except:

Answer 36

Provisions

Question 37

Which of the following items does not appear in the cash flow statement?

Answer 37

Deferred taxation

Question 38

In which of the following financial statements would you find proceeds on issue of bonds and equities?

Answer 38

Cash flow statement

Question 39

Which of these is shown on the income statement?

Answer 39

Interest

Question 40

The share premium account could be used in which one of the following situations?

Answer 40

A company does a capitalisation issue

Question 41

Which of the following best describes a minority interest/non-controlling interest in the context of a consolidated income statement?

Answer 41

Profits due to outside shareholders in subsidiaries

Question 42

Which of the following would you see on a cash flow statement?

Answer 42

Equity dividends paid

Question 43

Which of the following best describes the quick ratio (acid test)?

Answer 43

Receivables + cash / payables + short-term borrowings

Question 44

Which of the following is not a non-current asset?

Answer 44

Inventory held in the company warehouse

Question 45

When calculating earning per share (EPS), which of the following would not be removed from the operating profits of a company?

Answer 45

Ordinary share dividends

Question 46

A company has completed a 1:5 stock-split. Following the stock-split the most likely impact on the company's Debt to equity ratio will be:

Answer 46

It will remain unchanged

Question 47

A dividend can be paid with which of the following:

Answer 47

Profit and loss reserve

Question 48

The accounting equation can be described as

Answer 48

Assets = capital + reserves + liabilities

Question 49

Turnover less cost of sales less distribution costs less administration expenses equals:

Answer 49

Operating profit

Question 50

Which of the following statements does not apply to cash flow statements?

Answer 50

They show how much profit was earned during the year