Advertisements
Advertisements
प्रश्न
State whether following statement is true or false :
Analysis of financial statement is a tool but not a remedy.
पर्याय
True
False
Advertisements
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.
APPEARS IN
संबंधित प्रश्न
Capital balance is ascertained by preparing....................................
- Statement of affairs
- Cash account
- Drawing account
- Debtor’s account
Balance sheet is a nominal account.
State the objectives of financial statements from the view point of a business concern.
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 and explain any 'four objectives' of financial statement analysis from the business point of view.
State the significance of Analysis of Financial Statements to the ‘Lenders’.
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:
The methodical classification of financial statement is called _____________.
Select the appropriate answer from the alternatives given below & rewrite the completed statement
From financial statement analysis, the creditors are interested to know _____________.
Answer the following in brief :
State any three limitations of Analysis of financial statement.
State whether following statement is true or false :
Analysis of financial statement is a tool but not a remedy.
Explain the limitations of analysis of financial statements.
The Common Size Statement requires _________.
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.
Statement showing changes in cash and cash equivalent during a particular period.
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.
Ratio analysis measures profitability efficiency and financial soundness of the business.
Answer in one sentence only.
Give any three examples of current assets?
The term fund’ refers to
Which of the following are not tools of Financial Analysis?
- Cash Flow Statement
- Income Statement
- Balance Sheet
- Ratio Analysis
It is technique which involves regrouping of data by application of arithmetical relationships. Identify the technique and state any two advantages of the technique identified.
Convert the following Trading and Profit and Loss Account into Vertical Income Statement:
| Dr. | Trading, Profit and Loss Account (for the year ended 31st March, 2020) |
Cr. | |
| Particulars | Amount (₹) |
Particulars | Amount (₹) |
| To Opening stock | 50,000 | By Sales | 6,00,000 |
| To Purchases | 4,50,000 | By Closing Stock | 1,50,000 |
| To Carriage | 20,000 | ||
| To Direct expenses | 30,000 | ||
| To Wages | 50,000 | ||
| To Gross Profit c/d | 1,50,000 | ||
| Total | 7,50,000 | 7,50,000 | |
| To Office expenses | 62,500 | By Gross Profit b/d | 1,50,000 |
| To Finance expenses | 15,000 | ||
| To Selling expenses | 50,000 | ||
| To Net Profit c/d | 22,500 | ||
| Total | 1,50,000 | 1,50,000 | |
