Chapter 7: Financial Statements of a Company — Online MCQ Test
ACCOUNTANCY · CLASS 12 SECOND PUC · Karnataka State Board
Practice Chapter 7: Financial Statements of a Company with a free chapter-wise online MCQ test.
This chapter covers: Financial Statements Schedule III Companies Act 2013 Balance Sheet Statement of Profit and Loss Shareholders Funds Non Current Liabilities Current Liabilities Non Current Assets Cu....
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Chapter 7: Financial Statements of a Company — Important Questions & Answers
Under Schedule III of the Companies Act, 2013, which financial statement is prepared in a vertical format?
- A. Balance Sheet
- B. Cash Book
- C. Trial Balance
- D. Journal
Answer: A. Balance Sheet
Schedule III prescribes the vertical format for the Balance Sheet of a company.
Schedule III prescribes the vertical format for the Balance Sheet of a company.
The Balance Sheet of a company shows the position of assets and liabilities on:
- A. The first day of the accounting year
- B. A particular date
- C. The date of incorporation only
- D. The date of purchase of assets
Answer: B. A particular date
A Balance Sheet is a position statement prepared as on a particular date.
A Balance Sheet is a position statement prepared as on a particular date.
Which of the following is a component of Shareholders' Funds?
- A. Short-term borrowings
- B. Trade payables
- C. Share capital
- D. Deferred tax liability
Answer: C. Share capital
Shareholders' Funds include share capital, reserves and surplus, and money received against share warrants.
Shareholders' Funds include share capital, reserves and surplus, and money received against share warrants.
Which of the following is shown under Current Liabilities in a company's Balance Sheet?
- A. Goodwill
- B. Trade payables
- C. Long-term investments
- D. Capital work-in-progress
Answer: B. Trade payables
Trade payables are obligations expected to be settled in the normal operating cycle and are classified as current liabilities.
Trade payables are obligations expected to be settled in the normal operating cycle and are classified as current liabilities.
Security deposit paid to an electricity company and recoverable after 3 years will be shown as:
- A. Cash and cash equivalents
- B. Long-term loans and advances
- C. Short-term provisions
- D. Current investments
Answer: B. Long-term loans and advances
A security deposit recoverable after more than 12 months is classified as long-term loans and advances under non-current assets.
A security deposit recoverable after more than 12 months is classified as long-term loans and advances under non-current assets.
A bank overdraft repayable on demand should be classified as:
- A. Long-term borrowings
- B. Short-term borrowings
- C. Other non-current liabilities
- D. Reserves and surplus
Answer: B. Short-term borrowings
Borrowings repayable on demand are classified as short-term borrowings under current liabilities.
Borrowings repayable on demand are classified as short-term borrowings under current liabilities.
A company has inventory ₹80,000, cash ₹20,000, machinery ₹5,00,000, trade receivables due in 8 months ₹60,000, and goodwill ₹1,00,000. What is the amount of current assets?
- A. ₹1,00,000
- B. ₹1,40,000
- C. ₹1,60,000
- D. ₹6,60,000
Answer: C. ₹1,60,000
Current assets include inventory ₹80,000, cash ₹20,000 and trade receivables ₹60,000, totaling ₹1,60,000.
Current assets include inventory ₹80,000, cash ₹20,000 and trade receivables ₹60,000, totaling ₹1,60,000.
X Ltd. has equity share capital ₹10,00,000, preference share capital ₹2,00,000, securities premium ₹1,50,000, general reserve ₹50,000, debit balance of Statement of Profit and Loss ₹20,000, and share application money pending allotment ₹30,000. What is the amount of Shareholders' Funds?
- A. ₹13,50,000
- B. ₹13,80,000
- C. ₹14,10,000
- D. ₹12,00,000
Answer: B. ₹13,80,000
Shareholders' Funds = share capital ₹12,00,000 + reserves ₹2,00,000 - debit balance ₹20,000 = ₹13,80,000. Share application money pending allotment is shown separately.
Shareholders' Funds = share capital ₹12,00,000 + reserves ₹2,00,000 - debit balance ₹20,000 = ₹13,80,000. Share application money pending allotment is shown separately.
A loan from a director is repayable on demand. In the absence of any agreement for repayment after 12 months, it should be classified as:
- A. Long-term borrowings
- B. Other long-term liabilities
- C. Short-term borrowings
- D. Shareholders' funds
Answer: C. Short-term borrowings
A borrowing repayable on demand is treated as a current liability and shown under short-term borrowings.
A borrowing repayable on demand is treated as a current liability and shown under short-term borrowings.
Y Ltd. has 10,000 equity shares of ₹100 each fully called up, calls in arrears ₹50,000, forfeited shares account ₹20,000, securities premium ₹80,000, and debit balance of Statement of Profit and Loss ₹30,000. What is the amount of Shareholders' Funds?
- A. ₹9,70,000
- B. ₹10,00,000
- C. ₹10,20,000
- D. ₹10,50,000
Answer: C. ₹10,20,000
Share capital = ₹10,00,000 - ₹50,000 + ₹20,000 = ₹9,70,000. Reserves and surplus = ₹80,000 - ₹30,000 = ₹50,000, so Shareholders' Funds = ₹10,20,000.
Share capital = ₹10,00,000 - ₹50,000 + ₹20,000 = ₹9,70,000. Reserves and surplus = ₹80,000 - ₹30,000 = ₹50,000, so Shareholders' Funds = ₹10,20,000.