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Question
State, with reason, whether the following statement is True or False.
Financial management is essential for all types of organisation.
Options
True
False
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Solution
This statement is True.
- The business organisation irrespective of its type and nature needs finance for its formation, for carrying out day – to – day activities, for development and expansion, etc.
- Financial management is essential for all types of business organisation as it deals with procurement of funds and their efficient and effective utilization in the business.
- Financial management deals with planning, organizing, directive and controlling financial activities of business organisations.
- Generally all business activities are supported by the savings which comes from the society. Many a times these savings are not adequate to meet the financial requirement of the business. It is therefore necessary that available scarce fund must be utilized systematically and more efficiently.
- Financial management plays a very important role in making the best use of financial resources.
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Normally _________ gives advice to the Board of directors in respect of financial matters.
What are the main objectives of financial management? Briefly explain.
Short Answer Question
List any three objectives of financial statements?
Under which heads the following items are shown in the Balance Sheet of a company:
(i) Calls-in-Arrears
(ii) Commission Received in Advance
(iii) Debentures
(iv) Stores and Spare Parts
(v) Land and Building
(vi) Forfeited Shares Account?
Under which heads the following are shown in a company's Balance Sheet:
(i) Public Deposits
(ii) Office Furniture
(iii) Prepaid Rent
(iv) Outstanding Salaries
(v) Computer Software
(vi) Interest Accrued on Investment?
Hero Ltd. has raised following long-term loans on 1st April, 2018:
| 10,000; 10% Debentures of ₹ 100 each redeemable in four equal yearly | ₹ |
| installments beginning 1st July, 2019 | 10,00,000 |
| 11% Bank Loan from SBI repayable after 5 years | 20,00,000 |
| Interest on Debentures and Bank Loan has not yet been paid. |
How will be the above items shown in the Balance Sheet of the company as at 31st March, 2019?
| Prepare Balance Sheet of the Company as per Schedule III of the Companies Act, 2013: | ₹ |
| 10% Debentures of ₹ 100 each | 1,90,000 |
| Stock-in-Trade (inventories) | 40,000 |
| Goodwill | 20,000 |
| Provision for Tax | 60,000 |
Totalling of Balance Sheet is not required
From the following information extracted from the books of Howrach Ltd., prepare Balance Sheet of the company as at 31st March, 2019 as per Schedule III of the Companies Act, 2013:
| (₹ in '000) | (₹ in '000) | ||
| Long-term Borrowings | 1,000 | Fixed Assets (Tangible) | 1,600 |
| Trade Payable | 60 | Inventories | 40 |
| Share Capital | 800 | Trade Receivables | 160 |
| Reserves and Surplus | 180 | Cash and Cash Equivalents | 240 |
Prepare Balance Sheet of HP Ltd. as at 31st March, 2019 from the following information:
| ₹ | ₹ | |||
| Equity Share Capital | 20,00,000 | Surplus, i.e., Balance in Statement of Profit and Loss (Cr.) | 3,00,000 | |
| 12% Preference Share Capital | 10,00,000 | Stock | 6,00,000 | |
| Fixed Assets (At cost) | 46,60,000 | Sundry Debtors | 8,00,000 | |
| Accumulated Depreciation | 16,60,000 | Cash | 1,50,000 | |
| Investments | 4,00,000 | Loans and Advances | 50,000 | |
| Current Liabilities | 8,00,000 | Provision for Taxation | 2,00,000 | |
| 12% Debentures | 6,00,000 | Workmen Compensation Reserve | 1,00,000 |
Calculate Cost of Materials Consumed from the following:
Opening Inventory of Materials ₹3,50,000; Finished Goods ₹75,000; Stock-in-Trade ₹2,00,000; Closing Inventory of: Materials ₹3,25,000; Finished Goods ₹85,000; Stock-in-Trade ₹1,50,000; Purchases during the year: Raw Material ₹17,50,000; Stock-in-Trade ₹9,00,000.
From the following information, calculate Change in Inventory of Finished Goods: Opening Inventory and Closing Inventory of Finished Goods ₹2,00,000 and ₹1,75,000 respectively.
From the following information, calculate Change in Inventory of Stock-in-Trade: Opening and Closing Stock-in-Trade ₹5,00,000 and ₹4,50,000 respectively.
From the following information, calculate Change in Inventory of Stock-in-Trade: Opening and Closing Stock-in-Trade ₹5,00,000 and ₹4,00,000 respectively.
What are the objectives of financial statement?
Other things remaining the same, an increase in the tax rate on corporate profit will :
