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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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RELATED QUESTIONS
Advice to Board of Directors in respect of financial matter is given by _______.
Under which of the major heads will the following items be shown while preparing Balance Sheet of a company, as per Schedule III of the Companies Act, 2013:
(i) Unamortised Loss on Issue of Debentures (To be written off after 12 months from the date of Balance Sheet)
(ii) 10% Debentures
(iii) Stock-in-Trade
(iv) Cash at Bank
(v) Bills Receivable
(vi) Goodwill
(vii) Loose Tools
(viii) Truck
(ix) Provision for Tax; and
(x) Sundry Creditors?
Under which heads will the following items be shown in the Balance Sheet of a Company
(i) Bank Balance
(ii) Investments (Long-term)
(iii) Outstanding Salary
(iv) Authorised Capital
(v) Bills Payable
(vi) Unclaimed Dividents
(vii) Shares Option Outstanding Account
(viii) General Reserve; and
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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?
Identify the major heads under which the following items will be shown in the Balance Sheet of a company as per Schedule III of Companies Act, 2013:
(i) Provision for Tax
(ii) Loan payable on demand
(iii) Computer and related equipment
(iv) Goods acquired for trading
Under which major headings and sub-headings the following items will be shown in the Balance Sheet of a company as per schedule III of Companies Act, 2013?
(i) Provision for Employee Benefits.
(ii) Calls-in-Advance.
How are the following items shown while preparing Balance Sheet of a company:
(i) Surplus, i.e., Balance in Statement of Profit and Loss (Dr.);
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(iv) 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
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 ₹2,50,000; Finished Goods ₹1,00,000; Closing Inventory of Materials ₹2,25,000; Finished Goods ₹75,000; Raw Material purchased during the year ₹15,00,000.
From the following information of Hospitality Ltd. for the year ended 31st March, 2018, calculate amount that will be shown in the Note to Accounts on Changes in inventiories of Finished Goods, WIP and stock-in-Trade:
| Particluars |
Opening Inventory (₹) |
Closing inventory(₹) |
||
| Finished Goods |
5,00,000 |
5,50,000 |
||
| Work-in-Progress |
4,50,000 |
4,25,000 |
||
| Stock-in-Trade | 6,50,000 | 6,00,000 | ||
From the following information compute the amount to be shown in Note to Accounts on Employees Benefit Expenses: Wages ₹ 5,40,000; Salaries ₹ 7,20,000; bonus ₹ 1,05,000; Staff Welfare Expenses ₹ 60,000 and Business Promotion Expenses ₹ 50,000.
Out of the Following, identify the items that are shown in the Note to Accounts on Finance Costs:
(i) Interest paid on Borrowing from prince Finance Ltd.;
(ii) Interest paid on Term Loan to Bank;
(iii) Interest paid on Public Deposits;
(iv) Loss on Issue of Debentures Written off; and
(v) Bank Charges.
Under which line item (major head) of the Statement of Profit and Loss of non-financial company will the following be shown:
(i) Sale of Goods;
(ii) Revenue from Services Rendered;
(iii) Interest Earned;
(iv) Gain (Profit) on Sale of Assets;
(v) Purchases of Stock-in-Trade;
(vi) Salaries and Wages;
(vii) Interest paid to Bank;
(viii) Carriage Outward?
For optimal procurement of funds, a finance manager identifies different available sources and compares those items in terms of cost and associated risks. Identify concept highlighted in the above lines.
The foremost objective of financial management is :
Which of the following statements is false regarding financial management?
The foremost objective of financial management is:
