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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 the interest of tax authorities in the analysis of financial statements.
Prepare a balance sheet of Black Swan Ltd., as at March 31, 2017 form the following information:
| General Reserve | : | 3,000 |
| 10% Debentures | : | 3,000 |
| Statement of Profit & Loss | : | 1,200 |
| Depreciation on fixed assets | : | 700 |
| Gross Block | : | 9,000 |
| Current Liabilities | : | 2,500 |
| Preliminary Expenses | : | 300 |
| 6% Preference Share Capital | : | 5,000 |
| Cash & Cash Equivalents | : | 6,100 |
Under which major head will the following be shown:
(i) Share Capital; and (ii) Money Received Against Share Warrants?
Under which heads the following items are classified or shown on the Assets part of the Balance Sheet of a copany: (i) Loose Tools; (ii) Bills Receivable; (iii) Sundry Debtors: and (iv) Advances Recoverable in Cash?
From the following information, prepare Note to Accounts on Finance Costs: Interest paid to Bank ₹ 75,000; Interest on Debentures ₹ 58,000; Loss on issue of Debentures written off ₹ 27,500; and Commitment Charges ₹ 15,000.
For income measurement ______ basis of accounting is followed.
Find out Cost of goods sold Opening stock = 1002, Purchases = 50,000, Wages = 5000, Manufacturing expenses = 20,000.
What are the limitations of financial statements?
|
Rudra, Dev and Shiv were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Their fixed capitals were ₹ 6,00,000, ₹ 4,00,000 and ₹ 2,00,000 respectively. Besides his capital Shiv had given a loan of ₹ 75,000 to the firm. Their partnership deed provided for the following:
During the year Rudra withdrew ₹ 50,000 at the end of each quarter; Dev withdrew ₹ 50,000 in the beginning of each half year and Shiv withdrew ₹ 70,000 at the end of each half year. The profit of the firm for the year ended 31-3-2022 before allowing interest on Shiv's loan was ₹ 7,06,750. |
What will the amount of interest on drawings of the partners?
Richa and Anmol are partners sharing profits in the ratio of 3 : 2 with capitals of ₹ 2,50,000 and ₹ 1,50,000 respectively. Interest on capital is agreed @6% p.a. Anmol is to be allowed an annual salary of ₹ 12,500. During the year ended 31st March 2023, the profits of the year prior to calculation of interest on capital but after charging Anmol’s salary amounted to ₹ 62,000. A provision of 5% of this profit is to be made in respect of manager’s commission.
Following is their Profit & Loss Appropriation Account:
| Particulars | (₹) | Particulars | (₹) |
| To Interest on Capital | By Profit & loss account (After manager’s commission) | ___(2)___ | |
| Richa | ______ | ||
| Anmol | ______ | ||
| To Anmol’s Salary A/c | 12,500 | ||
| To Profit transferred to: | |||
| Richa’s Capital A/C (1) | ___(1)___ | ||
| Anmol’s Capital A/c | ______ | ||
| ______ | ______ |
The amount to be reflected in blank (2) will be:
