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प्रश्न
State whether following statement is true or false :
Analysis of financial statement is a tool but not a remedy.
पर्याय
True
False
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उत्तर
True
Explanation: Financial statements record financial transactions. However, the process of reviewing and drawing conclusions by evaluating Balance sheet and Profit and Loss Account is done through the analysis of financial statements. It is not a remedy; rather, it is a tool to evaluate results of business and helps in decision-making activity of the management. Analysis of financial statement gives the management an insight into the business and helps them in taking rational decisions.
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संबंधित प्रश्न
Give one word/term/phrase for the following statement.
An asset which can be converted into cash immediately.
Capital balance is ascertained by preparing....................................
- Statement of affairs
- Cash account
- Drawing account
- Debtor’s account
State the objectives of financial statements from the view point of a business concern.
What do you mean by Analysis of Financial Statement?
One of the objectives of ‘Financial Statements Analysis’ is to identify the reasons for change in the financial position of the enterprise, State two more objectives of this analysis.
State any one limitation of Analysis of Financial Statement.
JW Ltd. was a company manufacturing geysers. As a part of its long-term goal for an expansion, the company decided to identify the opportunity in rural areas. The initial plan was rolled out for Bhiwani village in Haryana. Since the village did not have a regular supply of electricity, the company decided to manufacture solar geysers. The core team consisting of the Regional Manager, Accountant and the Marketing Manager was taken from the Head Office and the remaining employees were selected from the village and neighbourhood areas. At the time of preparation of financial statements, the accountant of the company fell sick and the company debuted a junior accountant temporarily from the village for two months. The Balance Sheet prepared by the junior accountant showed the following items against the Major Heads and Sub-heads mentioned which were not as per Schedule III of the Companies Act, 2013.
| Items | Major Head/Sub-Head |
| Loose Tools | Trade Receivables |
| Cheques in Hand | Current Investments |
| Term Loan from Bank | Other Long-term Liabilities |
| Computer Software | Tangible Fixed Assets |
Identify any two values that the company wants to communicate to the society. Also, present the above items under the correct major heads and sub-heads as per Schedule III of the Companies Act, 2013.
State true or false with reason.
Gross Profit depends upon Net Sales.
Following incomplete information is available from the records maintained by Mr. Premnath.
|
Particulars |
1.4.2009 |
31.3.2010 |
|
Cash Balance Bank Balance Sundry Debtors Stock Furniture Creditors 10% Bank Loan |
12,000 26,000 20,000 24,000 24,000 20,000 20,000 |
13,000 30,000 26,000 26,000 24,000 20,000 20,000 |
(1) Mr. Premnath introduced additional capital in the business amounted to Rs 15,000 on 1st January, 2010.
(2) He has paid life insurance premium Rs 10,000 from the business account and withdrawn goods worth Rs 5,000 for his personal use.
(3) Write off Rs 1,000 as bad debts and maintain reserve for doubtful debts at 5% on remaining debtors.
(4) Provide depreciation at 5% p.a. on furniture.
(5) The closing balance of sundry creditors has been overvalued by Rs 2,000 in the books of account.
(6) Provide Interest on Capital and Bank Loan @ 10% p.a.
(i) Statement of Affairs as on 1.4.2009.
(ii) Statement of Affairs as on 31.3.2010.
(iii) Statement of Profit or Loss for the year ended 31st March, 2010.
State whether following statement are true or false :
Financial statements include only balance sheet.
Select the appropriate answer from the alternatives given below & rewrite the completed statement
Cash proceeds from issue of debentures is _______________.
Select the appropriate answer from the alternatives given below & rewrite the completed statement
From financial statement analysis, the creditors are interested to know _____________.
Give one word/term/ phrase for the following statement
Critical evaluation of financial statement to measure profitability.
Answer the following in brief :
What do you mean by analysis of financial statements?
Answer the following in brief :
State any three limitations of Analysis of financial statement.
Bill Payable is ___________
Give one word/term/phrase for the following statement.
The statement showing financial position for different periods of previous year and current year.
Give one word/term/phrase for the following statement.
Activity related to acquisition of long term assets and investment.
State true or false with reason.
Dividend paid is not a source of fund
State true or false with reason.
The short term deposits are considered as cash equivalent.
State true or false with reason.
Ratio analysis measures profitability efficiency and financial soundness of the business.
Which of the following are not tools of Financial Analysis?
- Cash Flow Statement
- Income Statement
- Balance Sheet
- Ratio Analysis
