QUESTION $1$

$[10]$

Select the correct answer from the provided options.

$1\mathrm{.}1$ The following shows the best strength of financial ratios

$(1)$

a$.$ Accounting practices vary in areas

The quality of assets is reflected in ratios

c$.$ You cannot identify the direction of the company is going in ratios

d$.$ Each ratio focusses on specific area of the organisation

$1\mathrm{.}2$ Which one is the incorrect accounting equation?

$(1)$

a$.$ Assets $=$ Liabilities $+$ Equity

Equity $=$ Assets $+$ Liabilities

c$.$ Assets $=$ Owners Equity $+$ Liabilities

d$.$ Liabilities $=$ Assets $-$ Equity

$1\mathrm{.}3$ What is the short$-$term financial goal of a firm?

$(1)$

a$.$ To ensure profitability, liquidity, and solvency

b$.$ To invest in long$-$term projects and assets

c$.$ To find the cheapest source of money

To manage day$-$to$-$day operations effectively

$1\mathrm{.}4$ The statement that best describes prudence concept is $?$

a$.$ If there is a choice of accounting methods, you need to select the option that has the least favourable effect on net income and financial position which is the most conservative.

b$.$ If there is a choice of accounting methods, you need to select the option that has the best effect on net income and financial position.

c$.$ If there is a choice of accounting methods, revenue and cost are recognised as they are earned irrespective of the timing of the receipt of cash or its payment.

Financial Management I $-$ FINMNGI$\_$I