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Q. In performing vertical analysis, the base for prepaid expense is .

1. Total current assets
2. Total assets
3. Non-current assets
4. Current liabilites

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Following are the balance sheets of Alpha Ltd. as at March 31^st, 2016 and 2017:

Particulars	2016 Rs.	2017 Rs.
I. Equity and Liabilities
Equity share capital	2, 00, 000	4, 00, 000
Reserves and surplus	1, 00, 000	1, 50, 000
Long-term borrowings	2, 00, 000	3, 00, 000
Short-term borrowings	50, 000	70, 000
Trade payables	30, 000	60, 000
Short-term provisions	20, 000	10, 000
Other current liabilities	20, 000	30, 000
Total	6, 20, 000	10, 20, 000
II. Assets
Fixed assets	2, 00, 000	5, 00, 000
Non-current investments	1, 00, 000	1, 25, 000
Current investments	60, 000	80, 000
Inventories	1, 35, 000	1, 55, 000
Trade receivables	60, 000	90, 000
Short term loans and advances	40, 000	60, 000
Cash at bank	25, 000	10, 000
Total	6, 20, 000	10, 20, 000

Q.

In performing vertical analysis, the base for prepaid expense is ___

1. None of these

2. Total liabilities

3. Total current assets

4. Total assets

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Q.

Which of the following would a company use as the base amount when completing a common size analysis on a balance sheet?

1. None of these

2. Total profit

3. Total assets or Total liabilities & equity

4. Total assets & equity

Q.

Apply common size analysis to ABC Company's cash balance given the following information: cash = Rs 1, 00, 000; total revenues = Rs 2, 50, 000; total assets = Rs 4, 25, 000; total liabilities = Rs3, 00, 000.

1. 23.50%

2. None of these

3. 33.30%

4. 58.58%

Q.

Apply common size analysis to ABC Company's Shareholders' Fund given the following information:
Selling expenses = Rs. 60, 000; total revenues = Rs. 2, 50, 000; Shareholders' Fund = Rs. 1, 25, 000, Total assets = Rs. 4, 25, 000; Total liabilities = Rs 3, 00, 000.

1. 10%

2. 20%

3. None of these

4. 29.41%

Q.

Q. The total of the % column of assets side in the common size balance sheet comes out to .

1. 75
2. 50
3. 100
4. 10

Q. Both assets and owner's equity (i.e. capital) would be increased by ___________.

1. Proprietor's withdrawals
2. Sale of good on credit
3. Purchasing a machinery on credit
4. Retained earnings

Q.

PRACTICAL PROBLEMS

A and B are in Partnership. Their Capitals on 1^st April 2010 were Rs 30, 000 each. The assets and liabilities as on 31^st March 2011 were as follows. Cash in hand Rs 2, 400, Cash at Bank Rs 16, 000 Bill Receivable Rs 4, 000, Debtors Rs 28, 600 Stock Rs 26, 000. Machinery Rs 14, 000, furniture Rs 8, 000, Bills Payable Rs 3, 000 Sundry creditors Rs 6, 000 Outstanding salary Rs 800.

Additional Information:

1) Provide Rs 600 as Bad Debts and 5% R.D.D.

2) Depreciate furniture @ 5% p.a. and Machinery @ 10% p.a.

3) Stock is found undervalued by Rs 2, 000.

4) Sundry creditors are found overvalued by Rs 1, 000.

5) Prepaid Insurance Rs 2, 000.

6) Additional capital introduced by partners Rs 4, 000 each.

7) Drawings of ‘A’ Rs 3, 000 and ‘B’ Rs 2, 000 calculate the profit for the year ended 31^st March 2011.

Q.

Following is the Balance Sheet of Raj Oil Mills Limited as at March 31, 2016

Particulars	Rs.
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital	7, 90, 000
b) Reserves and surplus	35, 000
2. Current Liabilities
a) Trade Payables	72, 000
Total	8, 97, 000
II. Assets
1. Non-current Assets
a) Fixed assets
Tangible assets	7, 53, 000
2. Current Assets
a) Inventories	55, 800
b) Trade Receivables	28, 800
c) Cash and cash equivalents	59, 400
Total	8, 97, 000

Calculate Current Ratio.

Q. Which of the following account will be credited for profit on sale of fixed assets?

1. Cash Account
2. Depreciation Account
3. Profit and Loss Account
4. Fixed Asset Account

Q.

Prepare a Common Size balance sheet from the following balance sheet of Aditya Ltd. and Anjali Ltd.:

Particulars	Aditya Ltd. Rs.	Anjali Ltd. Rs.
I. Equity and Liabilities
a) Equity share capital	6, 00, 000	8, 00, 000
b) Reserves and surplus	3, 00, 000	2, 50, 000
c) Current liabilities	1, 00, 000	1, 50, 000
Total	10, 00, 000	12, 00, 000
II. Assets
a) Fixed assets	4, 00, 000	7, 00, 000
b) Current assets	6, 00, 000	5, 00, 000
Total	1, 00, 0000*	12, 00, 000

*The total of Liabilities side must be equal to the total of Assets side, therefore, it should be 10, 00, 000.

Q.

When the balance as per Cash Book is the starting point, direct deposit by customer is_______________.

1. Added
2. Subtracted
3. Not required to be adjusted
4. Neither of the two

Q. Which of the following is objective of preparation of balance sheet?

1. To show financial position of a firm
2. To shows the nature and value of assets, the nature of value of liabilities and the position of capital
3. (A) or (B)
4. (A) and (B)

Q. is used as the base amount when completing a common size analysis on a balance sheet.

1. Total profit
2. Total assets
3. Shareholders' Fund
4. Curent liabilty

Q.

PRACTICAL PROBLEMS

(When one partner becomes insolvent)

Rahul, Rohit and Ramesh were partners in a firm sharing profit and losses in the ratio of 2:2:1 respectively.
The Balance Sheet as on 31^st March, 2012 was as follows:

Balance Sheet as on 31st December, 2011
Liabilities	Amount Rs	Assets		Amount Rs
Sundry Creditors	20, 000	Cash at Bank		8, 000
Bills payable	5, 000	Stock		20, 000
General Reserve	6, 000	Debtors	16, 000
Rahul’s Loan A/c	16, 000	Less: R.D.D.	1, 000	15, 000
Capital Account		Plant and Machinery		30, 000
Rahul	25, 000	Furniture		6, 000
Rohit	10, 000	Ramesh’s Capital A/c		3, 000
	82, 000			82, 000

The firm was dissolved on the above date:

1) The Assets realised as follows:

Debtors Rs 9, 000, Plant and Machinery Rs 26, 000, Stock Rs 14, 000 and Furniture Rs 3, 000.

2) The Creditors were paid Rs 18, 000 in full settlement and the bills payable were paid in full.

3) The realisation expenses amounted to Rs 3, 000.

4) Ramesh become insolvent and was able to bring in only Rs 1, 800 from his private estate.

Prepare:

1) Realisation A/c

2) Bank A/c and

3) Partner’s Capital A/c

Q. Write one Word / Term / Phrase for each of the following statement.

Excess of expenditure over income.