Assignment No. 1

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

Course Code: MBA604
Submitted Date: Last date of Submission:
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 objective of
‘Financial Statement’?
(a)It helps in financial (b) Helps in safeguarding
Forecasting interest of shareholders
(c) It helps in evaluating (d) All of the above
earning capacity of the firm

6. Net working capital is defined as………..
(a) Total assets minus(b) Excess of current assets
current assets over current liabilities
(c) Current liabilities(d) Marketable securities
less current assets and cash

6. The …….is a measure of liquidity which
excludes
….…….,generally the least liquid asset
(a) Current ratio,(b) Liquid ratio, inventory
account receivable
(c) Gross profit margin,(d) Current ratio, average
Operating ratio collection period

7. Outsiders in an organization doesn’t include
(a) Creditors (b) Suppliers
(c) Investors (d) Executives

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

8.  If sale on an accrual basis are Rs 5,00,000/- and
accounts recievable increased by Rs 30,000/-, thecash
received from customers would be………..
(a) Rs 5,00,000/- (b) Rs 4,70,000/-

manageranager

(c) Rs 5,30,000/-(d) cannot be determined

4 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

9.  The form of Balance Sheet is……..
(a) Horizontal (b) Vertical
(c) Horizontal or vertical(d) None of the above

5. Dividend is paid on ………….
(a) Authorised Capital(b) Reserve Capital
(c) Issued Capital (d) Subscribed Capital that is

paid up

10.  Which among the following is the limitation of
financial statement?
(a) Hinders the performance (b)Affected by window
of financial analysisdressing
(c) Lack of qualitative (d) All of the above
analysis

Section –B (20 Marks)
Q1. What are the objectives of preparing financial statement?
Q2.Write short notes on:
(a) What is deferred tax asset and deferred tax liability?
(b) Name two items which can be discussed under ‘Reserve and Surplus’.
Q3. Define liabilities. Mention important characteristics of liabilities. Which method would you adopt
for valuation of liabilities?
Q4. “Financial analysis is affected by window dressing and the personal ability and bias of the analyst.”
Comment.
Q5. What is revenue? What are the rules regarding revenue recognition?
Q6. What are comparative statements? Substantiate with example.
Q7. What is operating profit? How is it calculated? What is its significance?