Which of the following Accounts/ Statements shows the financial position of the business?

Profit and Loss Account.

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Balance Sheet.

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Funds Flow Statement.

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Cash-Book.

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Solution

The correct option is A Balance Sheet.
Balance Sheet is prepared on a particular date and it shows the financial position of a concern.
The financial position or financial worth of a concern is indicated by its assets and liabilities (excluding capital) on a particular date.Excess of assets over liabilities (other than capital) represents capital and is indicative of the financial soundness of a concern.

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Similar questions

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:

Is it true that profit and loss account shows the financial position of the enterprise?

INCOME STATEMENT (STATEMENT OF PROFIT AND LOSS)
for the year ended 31st March, 2019
Particulars	Note No.	(₹)
I. Revenue from Operations (Sales)		5,98,000
II. Other Income	1	19,500
III. Total Revnue (I + II)		6,17,500
IV. Expenses;
Cost of Materials Consumed		4,00,000
Change in Inventories of Finished Goods and Work-in-Progress	2	15,000
Employee Benefit Expenses		1,05,000
Depreciation and Amortisation Expenses		15,000
Other Expenses	3	20,000
Total Expenses		5,55,000
V. Profit before Tax (III − IV)		62,500
VI. Tax @ 30%		18,750
VII. Profit after Tax (V − VI)		43,750

Notes to Accounts

Particulars	₹
1. Other Income
Rent	15,000
Gain (Profit) on Sale of Machinery	2,500
Interest on Debentures held as Investments	2,000
	19,500
Changes in Inventories of Finished Goods and Work-in-Progress
(a) Finished Goods
Opening Inventories	37,500
Less: Closing Inventories	25,000
Sub-Total	12,500
(b) Work-in-Progress
Opening Inventories	22,500
Less: Closing Inventories	20,000
Sub-Total	2,500
Total (a + b)	15,000
2. Other Expenses
Office Expenses	12,500
Selling Expenses	6,000
Loss on Sale of Furniture	1,500
	20,000

Current Assets and Current Liabilities	As on 31st March, 2019 (₹)	As on 1st April, 2018 (₹)
Trade Receivables	25,000	20,000
Trade Payables	32,500	35,000
Outstanding Expenses	8,000	5,000
Prepaid Expenses	5,000	3,500

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