Difficult MCQs on Funding and Finance

Which document provides a summary of a company's planned income and expenditure for a specific period?

• Cash Flow Statement

• Profit and Loss Statement

• Balance Sheet

• Budget

In management accounting, what is the primary purpose of variance analysis?

• To identify new investment opportunities

• To compare actual performance with expected performance

• To calculate taxes owed

• To assess company solvency

Which of the following is a tool used to forecast future financial conditions?

• Budget

• Cash Flow Forecast

• Variance Report

• Trial Balance

Management accounting primarily focuses on:

• Financial reporting for external stakeholders

• Preparing tax returns

• Providing information for internal decision-making

• Auditing financial statements

Which of these procedures helps evaluate a company's ability to meet short-term liabilities?

• Profitability Ratio Analysis

• Solvency Analysis

• Liquidity Ratio Analysis

• Forecasting Revenue

What type of budget is adjusted based on actual levels of activity?

• Static Budget

• Flexible Budget

• Master Budget

• Zero-Based Budget

A company's solvency is best measured by:

• Current Ratio

• Net Profit Margin

• Debt-to-Equity Ratio

• Return on Assets

Which tool helps a business track the inflows and outflows of cash over time?

• Income Statement

• Budget

• Cash Flow Forecast

• Variance Analysis

What does a favorable variance indicate in a budget?

• Actual results are worse than expected

• Actual results are better than expected

• Costs have exceeded the budget

• Revenue has decreased

Forecasts are primarily used for:

• Historical analysis

• Determining solvency

• Planning future financial performance

• Recording past transactions