Introduction to Financial Statements

Q.

What is the financial year in case of company?

1. From 1st February to 31st January

2. From 1st January to 31st Decemeber

3. From 1st April to 31st March

4. None of these

Q.

Which of the following are financial statements of the company?

1. Balance Sheet

2. Statement of Profit and Loss

3. Both:

   Statement of Profit and Loss

   Balance Sheet

4. None of these

Q.

Which of the following sources of capital should not be selected by a business if its fixed cost is high?

1. Preference shares

2. All of the above

3. Debentures

4. Equity shares

Q.

What is 'meant by a Debenture?

Q.

Why do banks issue debentures?

Q. Companies can borrow loans directly from the public by issuing debt instruments called .

1. shares
2. capital
3. reserves
4. debentures

Q. It is an invitation to the public to apply for shares or debentures of the company or to make deposits in the company. Name it.

Q. Although income and expenditure account prepared by a not for profit organisation and profit and loss account prepared by an enterprise on the same principles of accounting why is it that in the case of non for profit organisation it is termed as income and expenditure account?

Q. are debt instruments that companies issue to raise loan from the public.

1. Share capital
2. Bank loan
3. Debentures
4. Equity

Q. _______ is a financial statement that shows the financial status of a business entity at a particular point of time.

1. Statement of Affairs
2. Balance sheet
3. Income statement
4. Cash flow statement

Q.

Companies can borrow loans directly from the public by issuing debt instruments called ___________

1. debentures

2. capital

3. None of these

4. shares

Q.

Companies can borrow loans directly from the public by issuing debt instruments called ___________

1. capital

2. debentures

3. None of these

4. shares

Q. Common size financial statements make it easier to compare firms ____________.

1. of different sizes
2. in different industries
3. with different degree of leverage
4. that use different inventory valuation methods (FIFO Vs. LIFO)

Q. The ____________ account highlights the profit earned or loss sustained by the business entity in the course of business operation during a given period.

1. Trial balance
2. Income and expenditure
3. Profit and loss
4. Balance sheet

Q. In accounting record, fixed assets are recorded at __________.

1. Historical cost
2. Replacement cost
3. Normated cost
4. Salvage value

Q. Write the word/term or phrase which can substitute each of the following statement.

The account which shows change in the values of assets.

Q. Choose the correct chronological order of ascertainment of the following profits from the profit and loss account.

1. Gross Profit, Operating Profit, Net Profit
2. Gross Profit, Net Profit, Operating Profit
3. Operating Profit, Gross Profit, Net Profit
4. Operating Profit, Net Profit, Gross Profit

Q. In India, Commercial Papers are issued as per the guidelines issued by ______________.

1. Forward Market Commission
2. Securities and Exchange Board of India
3. Reserve Bank of India
4. None of the above

Q. Which of the following information relating to fixed assets should be disclosed in the financial statements as per Accounting Standard-10 ?

1. Gross book value of fixed asset at the beginning of the year
2. Gross book value of fixed asset at the end of the year
3. Net book value of fixed asset at the beginning and at the end of the year
4. (A), (B), and (C)

Q.

__________of a company refers to the amount invested in the company by the shareholders.

1. None of the above

2. Corpus

3. Capital fund

4. Share capital

Q. In the books of Consignee the expenses incurred by him on consignment are debited to ___________.

1. Consignment A/c
2. Expense A/c
3. Consignor's A/c
4. Cash A/c

Q. Adjustments helps to provide true and fair view of the ____________ of the business.

1. State of affairs
2. Position of cash
3. Capital composition
4. None

Q. State True or False.

Statement of profit shows financial position of business.

Q. Write one word/term/phrase which can substitute each of the following

The debentures where no charge is created on the assets of company.