Assignment No. 2

Programme Name : MBA Semester: I Credit: 3
Course Title : FINANCIAL REPORTING &
ANALYSIS

Course Code: MBA604

Submitted Date: Last date of Submission: 20 th Feb, 2021
Max. Marks: 30 Weight age: 15 Marks
Instructions:
 Sec-A is compulsory which consists of 10 Multiple Choice Questions (1 mark per question)
 Attempt any five questions from Sec-B out of Seven questions (4 marks each)

Section –A (10 Marks)

1. Which among the following is the feature of
‘Window Dressing’?
(a) The concept of window dressing is
unethical
(b) Off-balance sheet financing
(c) It is usually done to mislead investors
from the true company or fund
performance
(d) All the above

6. Revenue is generally recognised when the earning
process is virtually complete and an exchange has
taken place. What principle is described herein?
(a) Consistency
(b) Matching
(c) Realisation
(d) Conservatism

a. This analysis is based on information
easily available to outsiders or externals
for the business:
(a)
External analysis
(b)
Internal analysis
(c) Horizontal analysis
(d) Vertical analysis

7. On 31st December, 2017, Brooks Co. decided to
end operations and dispose of its assets within
three months. At 31st December, 2017, the net
realisable value of the equipment was below
historical cost. What is the appropriate measurement
basis for equipment included in Books’ 31st
December, 2017 balance sheet?
(a) Historical cost
(b) Current reproduction cost
(c) Net realisable value
(d) Current replacement cost

a. This type of analysis refers to the
composition of financial statements
by expressing balance sheet total or
total revenue as 100% and
expressing rest of the figures as a

8.  Which among the following is the limitation of financial
statement?

(a) Hinders the performance of financial
analysis

percentage of the same.
i. External analysis
ii. Internal analysis
(c) Horizontal analysis
(d) Vertical analysis

(b) Affected by window dressing
(c) Lack of qualitative analysis
(d) All the above

b. Which among the following is the tool
of Financial Statement Analysis?
i. Comparative Statement
ii. Common Size Statement
iii.
Ratio Analysis
iv. All
the above

9. As generally used in accounting, what is
depreciation?
(a) It is a process of asset valuation for balance
sheet purposes
(b) It applies only to long-lived intangible assets
(c) It is used to indicate a decline in market value
of a long-lived asset
(d) It is an accounting process which allocates
long-lived asset cost to accounting periods

c. Comparative statements are prepared to
show:
i. Absolute amount
ii. Increase/Decrease in absolute amounts
(c) Percentage of totals
(d) All the above

10. What is the number of major heads of the Equity
and Liabilities side of a Company’s Balance
Sheet?
(a) Three (b) Four
(c) Two (d) Five

Section –B (20 Marks)

Q1. Discuss the activities associated with generation of revenue in a manufacturing concern.
Q2. How is ‘Window dressing’ a limitation of Financial Statement Analysis’?
Q3. What are comparative statements? Substantiate with example.
Q4. Discuss the advantages and disadvantages of FIFO method of inventory valuation
Q5. What is operating profit? How is it calculated? What is its significance?
Q6. Explain the meaning of the term ‘valuation.’ What are the objectives associated with valuation of assets?
Q7. What is horizontal analysis of financial statement?