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Question
State true or false with reason.
Financial Statement includes only Balance Sheet.
Options
True
False
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Solution
This statement is False.
Explanation:
- Balance Sheet: Shows the financial position of the entity at a specific point in time, listing assets, liabilities, and equity.
- Income Statement (Profit and Loss Account): Shows the financial performance of the entity over a period, detailing revenues and expenses.
- Cash Flow Statement: Provides information about cash inflows and outflows during a period.
- Statement of Changes in Equity: Reflects changes in the owner's equity during a specific period.
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Give one word/term/phrase for the following statement.
An asset which can be converted into cash immediately.
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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 analysis of financial statement from a business concern's point of view.
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 is true or false :
Government is not interested in analysis of financial statement.
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
Bills payable is _____________.
Give one word/term/ phrase for the following statement
Critical evaluation of financial statement to measure profitability.
Answer the following in brief :
State any three limitations of Analysis of financial statement.
The Common Size Statement requires _________.
Bill Payable is ___________
Give one word/term/phrase for the following statement.
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The term fund’ refers to
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| Dr. | Trading, Profit and Loss Account for the year ended as on 31st March,2020 |
Cr. | |
| Particulars | Amount ₹ | Particulars | Amount ₹ |
| To Opening stock | 20,000 | By Sales | 1,20,000 |
| To Purchases | 90,000 | By Closing Stock | 30,000 |
| To Carriage inward | 500 | ||
| To Wages | 10,000 | ||
| To Gross Profit c/d | 29,500 | ||
| Total | 1,50,000 | Total | 1,50,000 |
| To Office expenses | 12,500 | By Gross Profit b/d | 29,500 |
| To Selling expenses | 10,000 | ||
| To Finance expenses | 3,000 | ||
| To Net Profit c/d | 4,000 | ||
| 29,500 | 29,500 | ||
Which of the following is a tool of Analysis of Financial Statements?
