Purpose of Financial Statements

Q.

The balance sheet is prepared __________.

1. Either A or B
2. None of these

3. For a period of time

4. At a point in time

Q.

Is Rent a Fixed Asset?

Q. What is the purpose of preparing Trading and Profit and Loss account?

Q.

______________ present a true and fair view of the financial position of the business.

1. Cash Flow Statement

2. Balance Sheet

3. None of these

4. Statement of Profit and Loss

Q.

What is goodwill payment?

Q.

Under which head the following items of a non-financial company will be shown :

(i) Sales (ii) Sale of Scrap (iii) Dividend received (iv) Interest earned (v) Profit on sale of fixed asset and (vi) Profit on sale of investments.

Q.

Explain, What Is Stock?

Q.

What is the purpose of Statement of Profit and loss?

1. To present a true and fair view of the financial performance of the business

2. To present a true and fair view of the financial position of the business

3. Both :

   To present a true and fair view of the financial performance of the business

   To present a true and fair view of the financial position of the business

4. None of these

Q. Which ratio evaluates the capability of a business to meet its long-term financial obligations?

[0.88 marks]

1. Current ratio
2. Profitability ratio
3. Solvency ratio
4. Activity ratio

Q. what is the difference between trade receivables andaccount receivables, and similarly, the difference between tradepayables and account payables?

Q.

What is negative goodwill?

Q.

According to Schedule III, the financial statements are mentioned in ________________________________.

1. a vertical format and not horizontal format

2. a horizontal format and not vertical format

3. Both :

   a vertical format and not horizontal format

   a horizontal format and not vertical format

4. None of these

Q. Match the following items:

1. Asset
2. Income
3. Liability
4. Expense

Q.

All companies should prepare their financial statements comprising of profit or loss account and balance sheet as per _______________.

1. Schedule I

2. Schedule II

3. Schedule III

4. None of these

Q.

__________________ governs the functioning of Indian companies specifies the preparation of the financials.

1. None of these

2. Companies Act, 2013

3. Companies Act, 2012

4. Companies Act, 2011

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

Profit and Loss Account appearing on the asset side of a balance sheet.

Q. Companies Act, governs the functioning of Indian companies and helps in the preparation of the financials.

1. 2010
2. 2011
3. 2012
4. 2013

Q. Trading & Profit & Loss Account is the result of posting of _____________.

1. Operating entries
2. Closing entries
3. Adjusting entries
4. Transfer entries

Q. Trading Account is closed by transferring its balance to the _______________.

1. Capital A/c
2. Profit & Loss A/c
3. Manufacturing A/c
4. None of these

Q. Commission due but not paid to the manager at d end of the years appears under __________ side.

1. Asset
2. Liability
3. None
4. Trading A/c Debit side

Q. What is the excess amount called which the firm can get on selling its assets over and above the saleable value of its assets?