Which financial statement's structure is closest to that of the basic accounting equation?

Balance Sheet

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Income Statement

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Statement Of Cash Flows

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None of these

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Solution

The correct option is A
Balance Sheet

Balance Sheet structure is closest to that of the basic accounting equation

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Similar questions

Q. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reasons (R).

Assertion (A) - The income statement and the balance sheet are financial statements that show the cash flows in and out of the business unit.

Reason (R) - The general purpose of financial statements is to show the financial position and performance of a business unit.

In the context of the above two statements, which of the following is correct?

[0.88 marks]

Following is the Financial Statement of Garima Ltd., prepare cash flow statement.


Particulars	Note No.	31^st March 2017 (Rs)	31^st March 2016 (Rs)
I) Equity and Liabilities
1. Shareholders’ Funds
a) Share capital	1	4,40,000	2,80,000
b) Reserve and surplus-Surplus	2	40,000	28,000
2. Current Liabilities
a) Trade payables		1,56,000	56,000
c) Short-term provisions		12,000	4,000
(Provision for taxation)
Total		6,48,000	3,68,000
II) Assets
1. Non-current assets
a) Fixed assets
i) Tangible		3,64,000	2,00,000
2. Current assets
a) Inventories		1,60,000	60,000
b) Trade receivables		80,000	20,000
c) Cash and cash equivalents		28,000	80,000
d) Other current assets		16,000	8,000
Total		6,48,000	3,68,000

Notes to Accounts

Particulars	31st March 2017 (Rs)	31st March 2016 (Rs)
1. Share capital
a) Equity share capital	3,00,000	2,00,000
b) Preference share capital	1,40,000	80,000
	4,40,000	2,80,000
2. Reserve and surplus
Surplus in statement of profit and loss at the beginning of the year	28,000
Add: Profit of the year	16,000
Less: Dividend	4,000
Profit at the end of the year	40,000

Additional Information:

Q. A) Funds flow statement and cash flow statement are one and the same.
B) A cash flow statement can very well be equated with an 'Income statement'.
Of these statements :-

M K Limited is a computer hardware manufacturing company. While preparing its accounting records it takes into consideration the various accounting principles and maintains transparency. At the end of the accounting year, the company follows the 'Companies Act and Rules, 2013' for the preparation of its Financial Statements. It also prepares its Income Statement and Balance Sheet as per the format provided in Schedule III to the Act. Its Financial Statements depict its true & fair financial position. For the financial year ending March 31, 2017, the accountant of the company is not certain about the presentation of the following items under relevant Major Heads and Sub Heads, if any, in its Balance Sheet:

(i) Securities Premium Reserve

(ii) Calls in Advance

(iii) Stores and Spares

(a) Advise the accountant of the company under which Major Heads and Sub Heads, if any, he should present the above items in the Balance Sheet of the company,

(b) List any two values that the company is observing in the maintenance of its accounting records and preparation of its financial statements.

Q. The correct sequence in preparation of periodical financial statement would be :

1.

Preparation of balance sheet

2.

Preparation of cash flow statement

3.

Preparation of trial balance

4.

Preparation of Profit and Loss A/c
Select the correct answer from the option given below.

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Which financial statement's structure is closest to that of the basic accounting equation?

The correct option is A Balance Sheet Balance Sheet structure is closest to that of the basic accounting equation

The correct option is A
Balance Sheet

Balance Sheet structure is closest to that of the basic accounting equation