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Financial Statements of a Company Class 12 MCQs Questions with Answers
Multiple Choice Questions (MCQs):
Question 1.
Preliminary expense are required to be written off within _______ from the date of incurring.
(a) one year
(b) five years
(c) same year
(d) three years
Answer
Answer: (c) same year
Question 2.
In the notes to accounts, share capital in which company has not called the entire face value of shares is shown under the notes to accounts.
(a) Subscribed and fully paid up capital
(b) Subscribed but not fully paid up capital
(c) Reserve Capital
(d) None of these
Answer
Answer: (b) Subscribed but not fully paid up capital
Question 3.
The debentures to be redeemed within 12 months from the date of balance sheet is shown under
(a) short term borrowings
(b) long term borrowings
(c) other current liabilities
(d) long term liabilities
Answer
Answer: (c) other current liabilities
Question 4.
Which of the following item will not appear under short term provisions
(a) Provision for tax
(b) Proposed Dividend
(c) Provision for retirement benefits
(d) Provision for doubtful debts
Answer
Answer: (c) Provision for retirement benefits
Question 5.
Capital Reserve will be shown under
(a) current liabilities
(b) share capital
(c) reserves and surplus
(d) deferred tax liabilities
Answer
Answer: (c) reserves and surplus
Question 6.
Dividend is paid on
(a) authorised capital
(b) issued capital
(c) called up capital
(d) paid up capital
Answer
Answer: (d) paid up capital
Question 7.
Which of the following is not required to be prepared under companies act
(a) Statement of Profit and Loss
(b) Balanc Sheet
(c) Cash Flow Statement
(d) Funds Flow Statement
Answer
Answer: (d) Funds Flow Statement
Question 8.
Goodwill appears in a company’s balance sheet under
(a) Unamortised assets
(b) Non-current investments
(c) Intangible assets
(d) Tangible assets
Answer
Answer: (c) Intangible assets
Question 9.
Which of the following is not required to be prepared under companies act
(a) Statement of Profit and Loss
(b) Balance Sheet
(c) Cash Flow Statement
(d) Funds Flow Statement
Answer
Answer: (d) Funds Flow Statement
Question 10.
Claims against the company not acknowledged as debts is shown under
(a) current liabilities
(b) non-current liabilities
(c) commitments
(d) contintent liabilities
Answer
Answer: (d) contintent liabilities
Fill in the Blanks with correct word:
Question 11.
The balance sheet of company is prepared under schedule _______ part __________.
Answer
Answer: III,I
Question 12.
The financial statements are prepared under the provisions of Companies Act, ______.
Answer
Answer: 2013
Question 13.
Schedule VI has been replaced with schedule _______ in the new company law.
Answer
Answer: III
Question 14.
Balance sheet of a company can be prepared only in ______ form.
Answer
Answer: Vertical
Question 15.
The new Companies Act has replaced the concept of ______ with ________ to Accounts.
Answer
Answer: Schedules,notes
Question 16.
Cash and Cash Equivalents will be shown under ________.
Answer
Answer: Current assests
Question 17.
Dr. balance of Statement of Profit and Loss is shown under _______ as ________ item.
Answer
Answer: Reserves and surplus,Negative
Question 18.
Discount on issue of debentures to be written off after 12 months from the reporting date of balance sheet are shown under ________.
Answer
Answer: Non current assests
Question 19.
Share capital consist of _________ share capital and ________ share capital.
Answer
Answer: Equity,preference
Question 20.
Long term provisions are expected to be settled _________ 12 months after the reporting date of balance
sheet.
Answer
Answer: Beyond
State whether the following statements are true or false:
Question 21.
Bank charges are shown under finance costs.
Answer
Answer: False
Question 22.
Share forfeiture account is shown under subscribed capital but fully paid up.
Answer
Answer: False
Question 23.
Money received against share warrants is shown under the heading reserves and surplus.
Answer
Answer: False
Question 24.
Statement of profit and loss carrying positive value or negative value, is always shown under Reserves and Surplus.
Answer
Answer: True
Question 25.
Trade payables does not include sundry creditors.
Answer
Answer: False
Question 26.
Interest received by non-finance Company is shown under revenue from operations.
Answer
Answer: False
Question 27.
Sale of scrap in case of manufacturing company is a part of revenue from operations.
Answer
Answer: True
Question 28.
Calls in advance is shown under other current liabilities.
Answer
Answer: True
Question 29.
Discount allowed to receivables is shown under the heading finance costs.
Answer
Answer: False
Question 30.
Call in arrears are shown as other current assets as it is the amount receivable.
Answer
Answer: False
One word Questions:
Question 31.
State the importance of financial analysis for labour unions. (CBSE SP 2019-20)
Answer
Answer: Labor unions analyse the financial statements to assess whether an enterprise can increase their pay.
Question 32.
If operating is not given, what is the time for the operating cycle assumed?
Answer
Answer: 12 months.
Question 33.
If the operating cycle is given for 12 months and the payment cycle for trade payables is 15 months, how will you classify the liability?
Answer
Answer: Non-current Liability.
Question 34.
Name any one line item that can be shown under the major heading ‘Equity and Liabilities’ in a company’s Balance Sheet.
Answer
Answer: Shareholders’Funds
Question 35.
Name any one item that can be disclosed under ‘Short Term Provisions’.
Answer
Answer: Provision for Doubtful debts.
Question 36.
How would you treat preliminary expenses?
Answer
Answer: Preliminary expenses are written off in the year in which they are incurred.
Question 37.
Give one example of unamortised expenses.
Answer
Answer: Discount on issue of shares / debentures.
Question 38.
State any one component of shareholders’ funds.
Answer
Answer: Reserves & Surplus.
Question 39.
How would you treat share forfeiture account?
Answer
Answer: Added in the subscribed.
Question 40.
Mention one component of Reserves and Surplus.
Answer
Answer: Securities Premium Reserves.
Question 41.
Pratiksha Cartons Limited has given guarantee of ? 75,00,000 to a bank for raising loans from the bank by its subsidiary’ company. Where will this be shown in books of the company?
Answer
Answer: This will be mentioned in Notes to Accounts.
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