Executive Post Graduate Diploma in Management
Subject: Management Accounting & Analysis
Question paper
PART A (20 MARKS)
Objective Type (1 marks each)
1. What is a creditor’s objective in performing an analysis of financial statements?
a) To decide whether or not the borrower has the ability to repay interest and principal
on
borrowed funds.
b) To determine the firm’s capital structure.
c) To determine the company’s future earnings stream.
d) To decide whether or not the firm has operated profitably in the past.
2. What information does the auditor’s report contain?
a) The results of operations.
b) An unqualified opinion.
c) An opinion as to the fairness of the financial statements.
d) A detailed coverage of the firm’s liquidity, capital resources, and operations
3. What is an investor’s objective in financial statement analysis?
a) To determine if the firm is risky.
b) To determine the stability of earnings.
c) To determine changes necessary to improve future performance.
d) To determine whether or not an investment is warranted by estimating a company’s
future earnings stream.
4. XYZ Limited has current assets worth Rs.6,00,000/-, current liabilities worth
Rs.1,00,000/-,
zero long-term liabilities and shareholders equity totaling Rs.6,00,000/-. The total
assets of the
company would be:-
a) Rs.5,00,000/-
b) Rs.8,00,000/-
c) Rs.7,00,000/-
d) Rs.7,50,000/-
5. Which report gives a review on the profitability of a business?
a) Statement of changes in equity
b) Cash flow statement
c) Balance sheet
d) Income statement
