12th Class Accountancy Financial Statement Analysis Question Bank

done Assertion and Reason - Analysis of Financial Statement Total Questions - 3

• question_answer1)

  Assertion [A] :

  When financial statements of several years are compared against a chosen base year, it is called Dynamic Analysis.

  Reason [R] :

  Horizontal analysis is made to review and analyse the financial Statements for a number of years and it is also known as Time Series Analysis.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Only Assertion is correct. done clear
  D)
  Reason is correct but Assertion is not correct done clear
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• question_answer2)

  Assertion [A] :

  Vertical or static Analysis is made to review and analyse the financial statements of one year only, to compare the performance of other firms of the same type or divisions or departments of one firm.

  Reason [R]:

  It is a Time Series Analysis

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Only Assertion is correct. done clear
  D)
  Reason is correct but Assertion is not correct done clear
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• question_answer3)

  Assertion [A] :

  A company has postponed paying suppliers, so that the period-end cash balance appears higher in the books of the company. This is an example of window dressing.

  Reason [R] :

  Through Window Dressing a company can present a better financial position of the firm than the actual position.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Only Assertion is correct, done clear
  D)
  Reason is correct but Assertion is not correct done clear
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