Financial Statements of a Company Class 12 MCQs Questions with Answers
Financial Statements Of A Company Class 12 MCQ Question 1.
Which of the following is not a part of Finance Cost (in Statement of Profit and Loss) ?
(A) Bank Charges
(B) Interest Paid on Debentures
(C) Interest Paid on Public Deposits
(D) Loss on Issue of Debentures
Answer:
(A) Bank Charges
Explanation:
Bank charges is a part of other expenses in the statement of profit and loss statement
Financial Statements Of A Company MCQ Chapter 8 Question 2.
As per Schedule III, Part I of the Companies Act, 2013 ’calls-in-arrears’ will be presented under which of the following head/sub-head, in the Balance Sheet of a company ?
(A) Reserves and Surplus
(B) Current Liabilities
(C) Contingent Liabilities
(D) Shareholders’Funds
Answer:
(D) Shareholders’Funds
Explanation:
The amount which is not paid by defaulter shareholders is called ‘Calls-in-arrears’. This shows a debit balance. It is shown under Shareholders’ Fund as deduction from called up capital.
MCQ Of Financial Statements Of A Company Class 12 Question 3.
The Balance Sheet provides information about financial position of an enterprise :
(A) over a period of time
(B) during a period of time,
(C) for a period of time
(D) at a’ point of time
Answer:
(D) at a’ point of time
Explanation:
As the balance sheet is made at a particular date, so it shows the financial position at a point of time, that is the last day of the financial year.
MCQ On Financial Statements Of A Company Class 12 Question 4.
Under which of the following headings/sub-headings, Calls-in-advance will be presented in the Balance Sheet of a Company as per Schedule III Part I of the Companies Act, 2013 ?
(A) Current Liabilities
(B) Share Capital
(C) Share Application Money Pending Allotment
(D) Reserves and Surplus
Answer:
(A) Current Liabilities
Explanation:
Calls in advance is an amount which is excess paid by the shareholders against which the calls are not yet due. Calls in advance is shown separately, in the Balance Sheet as liability of the company under the heading ‘Current Liabilities’ until the calls are made and the amount actually becomes payable by the shareholder. ,
Financial Statements MCQ Chapter 8 Class 12 Question 5.
Securities Premium Reserve is shown on the liabilities side of the Balance Sheet under the head :
(A) Reserves and Surplus
(B) Current Liabilities
(C) Share Capital
(D) None of the above
Answer:
(A) Reserves and Surplus
Explanation:
As securities premium reserve is a type of reserve, it is shown in the Reserves and surplus head on the liabilities side of the Balance Sheet.
Financial Statements Disclose MCQ Chapter 8 Question 6.
Carriage Inwards is shown in the Statement of Profit and Loss under :
(A) Cost of materials consumed
(B) Other expenses
(C) Employees benefit expenses
(D) None of the above 0
Answer:
(B) Other expenses
Explanation:
Charges incurred for freight and transportation while purchasing goods are known as carriage inwards. It is treated as any other direct expense.
Financial Statements MCQ Class 12 Chapter 8 Question 7.
Purchase of goods for reselling is shown in the Statement of Profit and Loss under :
(A) Changes in inventories
(B) Cost of materials consumed
(C) Purchase of stock-in-trade
(D) None of the above
Answer:
(C) Purchase of stock-in-trade
Explanation:
Purchase of goods for re-selling is shown under the head ‘Expenses’ as Purchase of Stock-in-trade in Statement of Profit and Loss.
Financial Statements Of Company MCQ Chapter 8 Question 8.
Interest on Loans given by a financial company is shown in the Statement of Profit and Loss as :
(A) Revenue from Operations
(B) Other Income
(C) Sundry Expenses
(D) None of the above
Answer:
(A) Revenue from Operations
Explanation:
As the interest on loan given by a financial company forms the operational revenue so it is shown in the Revenue from operations.
MCQs Of Financial Statements Of A Company Chapter 8 Question 9.
Gain on sale of fixed assets by a financial company is shown in the Statement of Profit and Losses :
(A) Revenue from Operations
(B) Other Income
(C) Both (A) and (B)
(D) None of the above
Answer:
(B) Other Income
Financial Statement Of A Company MCQ Chapter 8 Question 10.
Dividend is paid on :
(A) Authorised Capital
(B) Subscribed Capital that is paid up
(C) Issued Capital
(D) None of the above
Answer:
(B) Subscribed Capital that is paid up
Explanation:
A dividend is a payment to shareholders that is drawn from a company’s paid-in-capital or shareholders’ equity.
Financial Statements Class 12 MCQ Chapter 8 Question 11.
Revenue from sale of goods manufactured is shown in the Statement of Profit and Loss as :
(A) Revenue from Operations
(B) Other Income
(C) Both (A) and (B)
(D) None of the above
Answer:
(A) Revenue from Operations
Explanation:
Sale of goods manufactured is an operating activity of the business and any revenue that arises from the same will be shown in revenue from operations.
Financial Statement Of A Company MCQs Class 12 Accountancy Chapter 8 Question 12.
Pick the odd one out:
(A) Shareholders’ funds
(B) Reserves and Surplus
(C) Non-current liabilities
(D) Current Liabilities
Answer:
(B) Reserves and Surplus
Explanation:
Reserves and Surplus are odd one as they are actually the accumulated profits of the company that can be used for the future contingencies.
Assertion And Reason Based MCQs
Directions: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.
Financial Statements Of Companies Class 12 MCQ Question 1.
Assertion (A): Financial statements are the end products of accounting process which reveal the financial results of a specified period and financial position as on a particular date.
Reason (R): The basic objective of these statements is to provide information required for decision
making by the management as well as other outsiders who are interested in the affairs of the undertaking, as per Section 129 Schedule III to the Companies Act, 2013 every year.
Answer:
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
Explanation:
Financial statements are the end products of accounting process which reveal the financial results of a specified period and financial position as on a particular date, so that the financial position of the company can be ascertained and analysed.
MCQs On Financial Statements Class 12 Chapter 8 Question 2.
Assertion (A): The balance sheet of the company needs to show the complete detail of the share capital of the company.
Reason (R): As per Schedule III of Companies Act, 2013, the Balance Sheet must disclose authorized capital, issued capital and subscribed capital for each class of share capital (i.e. for both Equity and Preference Shares) besides the called-up amount made by the company and paid-up amount made by the shareholders.
Answer:
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Question 3.
Assertion (A): Accounts Payables are recorded in the heading of Current Liabilities in the Balance Sheet of the company.
Reason (R): Accounts Payable is the money the company currently owes to its suppliers, partners, and employees.
Answer:
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
Question 4.
Assertion (A): All contingent liabilities are shown in the non-current liabilities section of the balance sheet.
Reason (R): A contingent liability refers to the claim which is uncertain to arise/which may or may not a rise/which is dependent on a happening in future.
Answer:
(D) Assertion (A) is false, but Reason (R) is true.
Explanation:
All contingent liabilities are shown as a footnote to the balance sheet.
Case-Based MCQs
I. Read the following information and answer the given questions:
sAjmera Ltd. raised the following loans in the year 2016-17: 12% Bank Loan from SBI on 1st April, 2016 ₹ 15,00,000
10,000, 10% Debentures of ₹ 100 each, redeemable at par in 4 equal yearly instalments, on 1 should be superscript October, 2016
The terms of the loans were :
(a) The Redemption of Debentures to begin from 30th September, 2017.
(b) Interest on the Bank Loan to be paid annually but Interest on Debentures to be paid half yearly.
The company had not paid the interest, both on the Bank Loan and on the Debentures till the Balance Sheet date.
Question 1.
Under which head will the long term borrowings will come?
(A) Current Liabilities
(B) Reserves and Surplus
(C) Non-current liabilities
(D) Notes to Accounts
Answer:
(C) Non-current liabilities
Explanation:
Any liability that needs to be fulfilled not recently is called non-current liability.
Question 2.
How will then 10% debentures be recorded in the Balance Sheet?
(A) In the Long term borrowings
(B) In the Non-current assets
(C) In the Current liabilities
(D) In the equity share capital
Answer:
(A) In the Long term borrowings
Explanation:
Debentures issued are shown under the heading of Non-current liabilities and sub-heading Long Term Borrowings.
Question 3.
What is the amount of debentures to be shown in the balance sheet?
(A) ₹ 10,00,000
(B) ₹ 5,00,000
(C) ₹ 0
(D) None of the above
Answer:
(A) ₹ 10,00,000
Explanation:
Ajmera Ltd. raised finance throught 10,000,10% Debentures of ₹ 100 each.
Question 4.
What is the total amount of Long-term borrowings to be shown in the Balance Sheet?
(A) ₹ 20,00,000
(B) ₹ 15,00,000
(C) ₹ 16,80,000
(D) ₹ 21,80,000
Answer:
(A) ₹ 20,00,000
II. Read the following information and answer the given questions:
Pinnacle Instruments Ltd. registered itself with a capital of ₹ 20,00,000 divided into Equity Shares of ₹ 100 each. On 1st June, 2015, the company issued 5,000 Equity Shares as fully paid to Mila Herbals, as purchase consideration for the purchase of plant and machinery. The remaining shares were issued to the public at par. Till the date of the Balance Sheet, the directors had called from the public, 60% of the nominal value of the shares. The amount called was received by the company.
Question 1.
What will be the amount of Share Capital shown in the Balance Sheet?
(A) ₹ 20,00,000
(B) ₹ 14,00,000
(C) ₹ 15,00,000
(D) ₹ 5,00,000
Answer:
(B) ₹ 14,00,000
Question 4.
How many shares did the Pinnacle Instruments Ltd. registered itself with?
(A) 5,000
(B) 15,000
(C) 20,000
(D) Can’t be determined.
Answer:
(C) 20,000
Explanation:
20,00,000 -s-100 = 20,000
Question 3.
What is the total amount of Fixed Assets as shown in the balance sheet?
(A) ₹ 2,90,000
(B) ₹ 40,000
(C) ₹ 3,30,000
(D) ₹ 2,50,000
Answer:
(C) ₹ 3,30,000
Explanation:
₹ 2,90,000 + ₹ 40,000 = ₹ 3,30,000
Question 4.
What is the total Equity and Liabilities of the Balance Sheet?
(A) ₹ 7,24,000
(B) ₹ 7,20,000
(C) ₹ 6,45,000
(D) ₹ 7,45,000
Answer:
(A) ₹ 7,24,000
Explanation:
Total in the Equity side = ₹ 3,98,000 + ₹ 1,30,000 + ₹ 1,70,000 + ₹ 26,000 = ₹ 7,24,000