{"id":21219,"date":"2021-03-16T16:45:55","date_gmt":"2021-03-16T11:15:55","guid":{"rendered":"https:\/\/ncertsolutions.guru\/?p=21219"},"modified":"2021-03-16T16:48:26","modified_gmt":"2021-03-16T11:18:26","slug":"ncert-solutions-for-class-12-accountancy-chapter-8","status":"publish","type":"post","link":"https:\/\/ncertsolutions.guru\/ncert-solutions-for-class-12-accountancy-chapter-8\/","title":{"rendered":"NCERT Solutions for Class 12 Accountancy Chapter 8 Financial Statements of a Company"},"content":{"rendered":"

Detailed, Step-by-Step NCERT Solutions for 12 Accountancy<\/a> Chapter 8 Financial Statements of a Company Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.<\/p>\n

Financial Statements of a Company NCERT Solutions for Class 12 Accountancy Chapter 8<\/h2>\n

Financial Statements of a Company Questions and Answers <\/span>Class 12 Accountancy Chapter 8<\/h3>\n

Test your Understanding-I (Page No. 155)<\/span><\/p>\n

Question 1.
\nState whether the following statements are True’ or ‘False’.
\n(a) Financial statements are the end products of accounting process.
\n(b) Financial statements are primarily directed towards the needs of owners.
\n(c) Facts and figures presented in financial statements are not at all based on personal judgements.
\n(d) Recorded facts are based on replacement cost.
\n(e) Going Concern concept assumes that the enterprise continues for a long-period of time.
\nAnswer:
\n(a) True, (b) True, (c) False, (d) False, (e) True.<\/p>\n

Question 2.
\nFill in the blanks with an appropriate word (s) :
\n(a) Financial statement\u2019s are the …………. of information to interested parties.
\n(b) The owners of a company are called ………….
\n(c) For income measurement basis of accounting is …………. followed.
\n(d) The statement which shows the assets and liabilities of a company is known as ………….
\n(e) Profit and loss account is also called statement.
\nAnswer:
\n(a) Basic sources
\n(b) shareholders
\n(c) accrual
\n(d) Balance Sheet
\n(e) Income.<\/p>\n

\"NCERT<\/p>\n

Test your Understanding-II (Page No. 163)<\/span><\/p>\n

Question 1.
\nWhat are the items shown under the heading ‘Reserves and Surplus’?
\nAnswer:
\nCapital Reserves, Capital Redemption Reserves, Balance of Securities Premium Account, General Reserve, Credit Balance of Profit and Loss Account.<\/p>\n

Question 2.
\nWhat are the items shown under the heading ‘Miscellaneous expenditure’?
\nAnswer:
\nPreliminary Expenses, Advertisement Expenditure, Discount on issue of Shares and Debentures, Share Issue expenses.<\/p>\n

Question 3.
\nMatch the following :
\n(i) Gross profit – (a) The explanatory notes to financial statements
\n(ii) Operating profit – (b) Amounts receivable by the company
\n(iii) Sundry Debtors – (c) Amounts payable by the company
\n(iv) Sundry Creditors – (d) Sales-Cost of goods sold
\n(v) Schedules – (e) Gross profit-Operating expenses
\n(vi) Net Profit – (f) Operating profit-interest and tax
\nAnswer:
\n(i) – (d)
\n(ii) – (e)
\n(iii) – (b)
\n(iv) – (c)
\n(v) – (a)
\n(vi) – (f)<\/p>\n

Short Answer Type Questions<\/span><\/p>\n

Question 1.
\nWhat is public company?
\nAnswer:
\nPublic Company\u2014According to Section 3(i) (iv) of the Companies Act 1956 “Public Company means a company
\n(a) which is not a private company and
\n(b) has a minimum paid up capital of Rs. 5 lakhs or such higher paid-up capital and
\n(c) is a private company which is a subsidiary of a company which is not a private company.” Companies Amendment Act 2000 states that a public company cannot be registered with a, capital of less than Rs. 5 lakhs.<\/p>\n

A public company may be a listed company or unlisted company. A listed company is a public company which has any of its securities listed in any recognised stock exchange. An unlisted company is one whose securities are not listed on any recognised stock exchange for trading.<\/p>\n

\"NCERT<\/p>\n

Question 2.
\nWhat is private limited company?
\nAnswer:
\nPrivate Company\u2014According to Section (3)(i), (iii), a private company means a company which has a minimum paid up capital of Rs. one lakh or such higher paid-up capital as may be prescribed by its articles\u2014
\n(i) Restricts the rights of members to transfer its shares,
\n(ii) Limits the number of its members to 50 excluding :
\n(a) persons who are in employment of the company, and
\n(b) persons, who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased.
\n(iii) Prohibits any invitation to the public to subscribe to any shares in or debentrues of the company.
\n(iv) Prohibits any invitation or acceptance of deposits from persons other than its members, directors and relatives.<\/p>\n

Question 3.
\nDefine Government Company.
\nAnswer:
\nGovernment Company\u2014According to Section 617 of the Companies Act 1956, “a Government Company is a company in which not less than 51% of the paid-up capital is held by the Central Government, or by any State Government or Governments or partly<\/p>\n

by the Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government Company.”<\/p>\n

Question 4.
\nWhat do you mean by a listed company?
\nAnswer:
\nA public company may be listed or unlisted company. A listed company is that public company which has any of its securities are listed in any recognised stock exchange in India for trading. Listing of securities in any recognised stock exchange gives a guarantee and impression in the minds of potential investors about the goodwill of the company.<\/p>\n

Question 5.
\nWhat are the uses of securities premium?
\nAnswer:
\nSecurity Premium and its Uses\u2014When shares of a company are issued at a price more than the face value, it is said to be an issue of shares at premium. When shares are issued at premium, the premium amount is credited to a separate account called “Securities Premium Account” because it is not a part of Share Capital.<\/p>\n

Rather, it represents, a capital gain and being a credit balance, is shown on the liabilities side of the company’s balance sheet under the heading “Reserves and Surplus”.<\/p>\n

According to Section 78 of the Companies Act, Securities Premium Account may be used by the company :<\/p>\n