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प्रश्न
Briefly explain any three limitations of financial statements.
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उत्तर
- Lack of qualitative information: Qualitative information, that is non – monetary information is also important for business decisions.
For example- Efficiency of the employees and efficiency of the management. But this is ignored in financial statements. - Record of historical data:
Financial statement are prepared based on historical data. They may not reflect the current position. - Ignores price level changes:
Adjustments for price level changes are not made in the financial statements. Hence financial statements may not reveal the current position.
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संबंधित प्रश्न
State any objective of Financial Statement Analysis’.
Name any two financial statements prepared by a not-for-profit organisation.
From the following information prepare the balance sheet of Gitanjali Ltd., as per the (Revised) Schedule VI:
Inventories Rs. 14,00,000; Equity Share Capital Rs. 20,00,000; Plant and Machinery Rs. 10,00,000; Preference Share Capital Rs. 12,00,000; Debenture Redemption Reserve Rs. 6,00,000; Outstanding Expenses Rs. 3,00,000; Proposed Dividend Rs. 5,00,000; Land and Building Rs. 20,00,000; Current Investments Rs. 8,00,000; Cash Equivalent Rs. 10,00,000; Short term loan from Zaveri Ltd. (A Subsidiary Company of Twilight Ltd.) Rs. 4,00,000; Public Deposits Rs. 12,00,000.
State giving reason whether Trade Payables are classified as Current Liabilities or Non-current Liabilities in the Calance Sheet of a Company as per Schedule III of the Companies Act, 2013 in the following cases:
| Case |
Operating Cycle Period (Months) |
Expected Payment Period (Months |
||
| 1 |
10 |
11 |
||
| 2 |
10 |
12 |
||
| 3 | 10 | 13 | ||
| 4 | 14 | 13 | ||
| 5 |
15 |
16 |
||
Which of the following statement is not true?
Assertion (A): The focus of calculation of working capital revolves around managing the operating cycle of the business.
Reason (R): It is because the concept of operating cycle is required to ascertain the liquidity of assets and urgency of payments to liabilities.
In the context of the above two statements, which of the following is correct?
Financial statements are the ______ of information for interested parties.
What are the limitations of financial statements?
What are the components of income statement?
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The average number of months for which interest on drawings will be calculated will be:
