rf ‘ | wattle | Choice Questions ANA LYSIS OF FINANCIAL STATEMENTS chiple Choice Questions (MCs) suet he correct alternative: il _ nancial statements are summarised sta : pusiness about tements of accounting data which provide information of the @ Current Assets and Quick Assets . : © Debt and Equity. @ Profiabily sot Franca Pstion, © Operating and Non-operating Income. 2, The Balance say ropes information about financial position of an enterprise over a period of time. ® fora period of ti © during a period of time. r ime. © a © ata point of time. (CBSE 2020) 3, Financial performance of an accounting entity for an accounting period is given by @ (ash Flow Statement, © Statement of Profit and Loss. © Balance Sheet. © Directors’ Report. 4, Debentures redeemable after 10 years from the date of issue are shown as @ Long-term Borrowings. . © Other Long-term Liabilities. © Short-term Borrowings. @© Other Short-term Liabilities, 5, Name the item out of the following which is shown as Short-term Provision: @ Provision for Tax . @® Interest Accrued but not Due © Employees’ Provident Fund @ Interest Accrued and Due 6, Money Received Against Share Warrants is shown as @ Shareholders’ Funds. @® Other Long-term Liabilities. © Long-term Provisions. @© Other Current Liabilit 7. Share Application Money (refundable) is shown as @ Other Long-term Liabilities. ® ther Current Liabilities. © Short-term Provisions. @ Short-term Borrowings. 8. Callsin-Advance and interest payable thereon is shown as @ ‘Shareholders’ Funds ® other Non-current Liabilities. © Other Current Liabilities. @ Trade Payables. i 9 Mi tights are @ Tangible Fixed Assets. © Intangible Assets Under Development. © Intangible Fixed Assets. @ Capital Work-n-Progress, 10. Premium on Redemption of Debentures is shown 25 © Short-term Borrowings. © Long. wings. Cece @ Short-term Provisions. © other Long-term Liabilities-coda Au Aid to Accountaney—cysp y, = Ir “Loose Tools’ appear in the company’s Balance Sheet under the head/sub-head ® Inventory. « © Non-current Assets. © Other Current Assets. @ Stores and Spare Parts. (€85¢ 2044 12. Surplus, ie, Balance in Statement of Profit and Loss is shown as ® Share Capital. © Reserves and Surplus. © Other Long-term Liabill @ Current Liabilities. 13. Which of the following is not an objective of Analysis of Financial Statements? ® To judge the financial health of the firm. © To judge the short-term and long-term liquidity position of the firm. © To judge the reasons for change in the profitability of the firm. @© To judge the variations in the accounting practices of the business followed by different WW. enterprises. (CBSE 2029) 14, Ina company's Balance Sheet, computer software is shown under the main head @® Non-Current Liabilities. ® Current Liabilities. © Non-Current Assets. @ Current Assets. 15. Which of the following is a limitation of financial analysis? | @ tis just a study of reports of the company. ©® It judges the ability of the firm to repay its debts. © It identifies the reasons for change in financial position. @ It ascertains the relative importance of different components of the financial position of the firm. (CBSE 2020) 16. An asset shall be shown/classified as Curreny Asset when: ® It is expected to be realised in, or is intended for sale or consumption in company's norma Operating Cycle. © tis held primarily for the purpose of being traded. © tis expected to be realised within 12 months after the reporting date. @ Ary of the above. 17. Which of the following is not a limitation of financial analysis? @ Subjectivity © Aualitative aspects ignored © Inter-firm comparison @ Window dressing 18. Ina Company's Balance Sheet, Debit (Negative) balance of Statement of Profit and Loss is shown unde" ® Non-current Liabilities. ® Current Liabilities. © Non-current Assets. @ Reserves and Surplus. 19. Under which of the following headings/sub-headings, Calls-in-Advance will be presented in the B22" Sheet of a company as per Schedule Ill Part | of the Companies Act, 2013? @® Current Liabilities © Share Capital © Share Application Money Pending Allotment @) Reserves and Surplus (CBSE 20 20. Identify the item which is not a part of Shareholders’ Funds: @ Share Application Money Pending Allotment (@) Share Capital ants. © Reserves and Surplus @ Money Received against Share Wart| uttiple Choice Questions mcg.113 21. Which of the following is nota sub-head under the Current Assets? @ ash and Cash Equivanets © Trademarks © Short-term Loans and Advances @© Inventories (CBSE 2020) 32. From the given items which isa part of Current Liabilities: Inventories © Trade Payables © Cash and Cash Equivalents @© Trade Receivables Which of the following is not shown as Non-Current Liabilities? @ Trade Payables @® Long-term Borrowings © Deferred Tax Liabilities @ Long-term Provisions ‘sper Schedule Il, Part | of the Companies Act, 2013 ‘Unpaid dividend’ will be presented under which of the following head/sub-head, in the Balance Sheet of a company? @ Reserves and Surplus © Current tiabilities © Contingent Liabilities @ Shareholders’ Funds Which of the following is not presented under‘Current Liabilities'in the Balance Sheet of a company? 23. = (CBSE 2020) 25. @ Short-term Borrowings © Deferred Tax Liabilities © Short-term Provisions @ Trade Payables (CBSE 2020) 26, ‘Calls-in-Advance' is shown in the company’s Balance Sheet under the head @ Non-current Asset. ® Current Liabilities. (CBSE 2020) © Shareholders’ Funds. @ Non-current Liabilities. 27. Ifthe Operating Cycle cannot be identified, itis assumed to be a period of @® 10 months. @® 1 months. © 9 months. @ 12 months. 28. Cash and Cash Equivalents does not include @ Cheques. © Balances with banks. © Bank deposits with more than 12 months maturity. @ Inventories. 29. Ina company’s Balance Sheet, Provision for Employees Ber @® Non-current Liabilities. © Current Liabilities. © Non-current Assets. © Current Assets. 30, Which of the following is not an item under ‘Current Assets’? ® Cash and Cash Equivalents. ® Short-term Loans and Advances. © Capital Advances. @ Inventories. which is not shown in the Note to Accounts on Other Expenses: ® Courier Expenses © Internet Expenses © Rent for factory @ Wages 3 2 Out ofthe following, identify the item that is not shown in the Note to Accounts on Finance Costs: @® Bank Deposit @ Discount on Issue of Debentures Written off. nefits to be paid within 12 months is shown under (CBSE 2020) 31. Out ofthe following items, identify @® Interest paid on term loan © Interest paid on Bank OverdraftMCQ.114 Au Aidl to Accountancy ~Cise x, 33. Under which of the following head/sub-head Is ‘Forfeited Shares’ presented in the Balance Sheer oy a Company? @® Reserves and Surplus © Share Capital © Other Long-term Liabilities @ Other Current Liabilities (CBSE 2075 34. Which of the following is not the limitation of financial statements? @® 'gnore qualitative aspects. © Personal bias. © Ignores price level change. @ Provide information about the profitability of the business. 35, ‘Public Deposits’ appear in the company’s Balance Sheet under the head/subhead @ Intangible Assets. @® Shareholders’ Funds. © Current Liabilities. @® Non-current Liabilities. (CBSE 2020, 36, ‘Security Deposits’ are presented in the Balance Sheet of the company under the subhead @ Other Non-current Assets. © Fixed Assets. © Long-term Loans and Advances. @ Other Current Liabilities. (CBSE 2020, 37. In.acompany’s Balance Sheet, Investment in Land and Building is shown under @® Non-current Liabilities. © Current Liabilities. © Non-current Assets. © Current Assets. 38. Schedule Ill has prescribed format of presentation of Balance Sheet. @® Vertical © Horizontal © Either (a) or (b) @ Neither (a) nor (b) 39. is shown in a company’s Balance Sheet under the sub-head Short-term Provisions. @ Unpaid Dividend © Provision for Tax © Calls-in-Advance @ Interest accrued and due on borrowings 40. Claim against the company not acknowledged as debt is shown under @ Capital Commitments. © Current Liabilities. © Contingent Liabilities. @ Non-current Liabilities.