Chapter Exam

Chapter 7: Financial Statements of a Company — Online MCQ Test

Q: Under Schedule III of the Companies Act, 2013, which financial statement is prepared in a vertical format?

Answer: A. Balance Sheet — Schedule III prescribes the vertical format for the Balance Sheet of a company.

Q: The Balance Sheet of a company shows the position of assets and liabilities on:

Answer: B. A particular date — A Balance Sheet is a position statement prepared as on a particular date.

Q: Which of the following is a component of Shareholders' Funds?

Answer: C. Share capital — Shareholders' Funds include share capital, reserves and surplus, and money received against share warrants.

Q: Which of the following is shown under Current Liabilities in a company's Balance Sheet?

Answer: B. Trade payables — Trade payables are obligations expected to be settled in the normal operating cycle and are classified as current liabilities.

Q: Security deposit paid to an electricity company and recoverable after 3 years will be shown as:

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.

Q: A bank overdraft repayable on demand should be classified as:

Answer: B. Short-term borrowings — Borrowings repayable on demand are classified as short-term borrowings under current liabilities.

Q: 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?

Answer: C. ₹1,60,000 — Current assets include inventory ₹80,000, cash ₹20,000 and trade receivables ₹60,000, totaling ₹1,60,000.

Q: 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?

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.

Q: 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:

Answer: C. Short-term borrowings — A borrowing repayable on demand is treated as a current liability and shown under short-term borrowings.

Q: 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?

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.

ACCOUNTANCY · CLASS 12 SECOND PUC · Karnataka State Board

Practice Chapter 7: Financial Statements of a Company with a free chapter-wise online MCQ test for Karnataka State Board CLASS 12 SECOND PUC ACCOUNTANCY. 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.... AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 7: Financial Statements of a Company — Important Questions & Answers (FAQ)

Frequently asked questions from Karnataka State Board CLASS 12 SECOND PUC ACCOUNTANCY — Chapter 7: Financial Statements of a Company, with answers and explanations. These are sample questions; the exam has its own separate question set.

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.

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.

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.

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.

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 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.

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.

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.

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.

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.

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Chapter 8: Analysis of Financial Statements