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प्रश्न
Financial Statements are prepared following the constituent accounting concepts principles procedures and also the legal environment in which the business organisation operate. These statements are the source of information on the basis of which conclusions are drawn about the profitability and financial position of a company so that their users can easily understand and use them in their economic decisions in a meaningful way.
From the above statements identify any two values that a company should observe while preparing its financial statements. Also, State under which major headings and sub-headings the following items will be presented in the Balance Sheet of a company as per Schedule III of the Companies Act 2013
(1) Capital Reserve
(2) Calls-in-Advance
(3) Loose Tools
(4) Bank overdraft
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उत्तर
The values that must be observed by a company while preparing its financial statements are
1)these statements must be drawn following the defined accounting concepts, principles and methods, and
2) the financial statements should be drawn following the legal framework of the country of operations.
| Items | Major Head | Sub – Head |
| Capital Reserve | Shareholder’s Fund | Reserve & Surplus |
| Calls – in - Advance | Current Liabilities | Other Current Liabilities |
| Loose Tools | Current Assets | Inventories |
| Bank Overdraft | Current Liabilities | Short-term Borrowings |
Proprietary Ratio of M Ltd. 0.80: 1
Proprietary Ratio = `"Proprietor's Funds"/"Total Assets"`
| Transactions | Effects |
| Obtained a loan from bank Rs 2,00,000 payable after 5 years |
Decrease, The total assets would increase with the amount of loan raised and proprietor’s funds remains the same |
| Purchased machinery for cash Rs 75,000 | No Change, Total Assets will increase and decrease by the same amount |
| Redeemed 5% Redeemable preference shares Rs 1,00,000 |
Decrease, Proprietor’s Funds and Total Assets both will decrease by the same amount but the percentage change would be more on Proprietor’s Fund already in ratio 0.80: 1 |
| Issued equity shares to vendors of machinery purchased for Rs 4,00,000 | Increase, Even though both Proprietor’s Funds and Total Assets both will increase by the same amount but the percentage change would be more in Proprietor’s Fund |
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संबंधित प्रश्न
What is meant by 'Analysis of Financial Statements'? State any two objectives of such an analysis.
Briefly explain the significance of 'Analysis of financial statements' to (a) The Finance Manager, and (b) Trade Payables.
Name any two financial statements prepared by a not-for-profit organisation.
Short Answer Question
State the meaning of financial statements?
Long Answer Question
Prepare the format of balance sheet and explain the various elements of balance sheet.
Long Answer Question
Explain the process of preparing income statement and balance sheet.
Show the following items in the balance sheet as per the provisions of the Companies Act, 2013 in Schedule III:
| Particulars | Rs. | Particulars | Rs. |
| Preliminary Expenses | 2,40,000 | Good will | 30,000 |
| Discount on issue of shares | 20,000 | Loose tools | 12,000 |
| 10% Debentures | 2,00,000 | Motor Vehicles | 4,75,000 |
| Stock in Trade | 1,40,000 | Provision for tax | 16,000 |
| Cash at bank | 1,35,000 | ||
| Bills receivable | 1,20,000 |
From the following information, prepare the balance sheet of Gitanjali Ltd.
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.
From the following information, prepare the balance sheet of Jam Ltd.
Inventories Rs. 7,00,000; Equity Share Capital Rs. 16,00,000; Plant and Machinery Rs. 8,00,000; 8% Preference Share Capital Rs. 6,00,000; General Reserves Rs. 6,00,000; Bills payable Rs. 1,50,000; Provision for taxation Rs. 2,50,000; Land and Building Rs. 16,00,000; Noncurrent Investments Rs. 10,00,000; Cash at Bank Rs. 5,00,000;Creditors Rs. 2,00,000; 12% Debentures Rs. 12,00,000.
Brinda Ltd. has furnished the following information:
(a) 25,000, 10% debentures of Rs. 100 each;
(b) Bank Loan of Rs. 10,00,000 repayable after 5 years;
(c) Interest on debentures is yet to be paid.
Show the above items in the balance sheet of the company as at March 31, 2017.
What are the major heads in the Equity and Liabilities part of the Balance Sheet as per Schedule III?
Under which sub-head will the following be classified or shown:
(i) Long-term Borrowings;
(ii) Deferred Tax Liabilities (Net); and
(iii) Long-term Provision?
Under which main head and sub-head of Equity and Liabilities part of the Balance Sheet are the following items classified or shown:
(i) Bonds
(ii) Debentures
(iii) Public Deposits
(iv) Capital Redemption Reserve
(v) Forfeited Shares Accounts
(vi) Sundry Creditors and
(vii) Interest Accrued but not Due on Debentures ?
Classify the following items under major head and sub-head (if any) in the Balance Sheet of a company as per Schedule III of the Companies Act, 2013:
(i) Capital Work-in-Progress:
(ii) Provision for Warranties;
(iii) Income received in Advance; and
(iv) Capital Advances
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.
Choose the appropriate alternative from the given options:
Which of the following is a limitation of financial analysis?
Expenses for a business for the first year were ₹ 80,000. In the second year, it was increased to ₹ 88,000. What is the trend percentage in the second year?
___________ is conducted by bankers and government.
Bank overdraft is shown in the balance sheet under the ______.
A company prepares its Balance Sheet as per the format in ______.
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.
Consider the following statements.
Statement 1 - "Financial statements are primarily directed towards the needs of owners"
Statement 2 - "Financial statements are primarily not directed towards the needs of owners"
Consider the following statements.
Statement 1 - "Facts and figures presented in financial statements are based on personal judgements"
Statement 2 - "Facts and figures presented in financial statements are not at all based on personal judgements"
What are the items shown under the heading 'Reserves and Surplus'?
What are the uses and importance of financial statements?
Carriage Inwards is shown in the Statement of Profit and Loss under ______.
Assertion (A): Financial statements are the end products of the accounting process which reveal the financial results of a specified period and financial position as on a particular date.
Reason (R): The basic objective of these statements is to provide information required for decision making by the management as well as other outsiders who are interested in the affairs of the undertaking, as per Section 129 Schedule III to the Companies Act, 2013 every year.
Securities Premium is shown under which head in the Balance Sheet ?
|
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. |
How much amount of net profit will be transferred to Profit and Loss Appropriation A/c?
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:
|
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. |
How much amount of net profit will be transferred to Profit and Loss Appropriation A/c?
|
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 (1) will be:
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:
