MCQ Questions for Class 12 Accountancy Chapter 8 Financial Statements of a Company with Answers

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Financial Statements of a Company Class 12 MCQs Questions with Answers

Multiple Choice Questions (MCQs):

Question 1.
Preliminary expense are required to be written off within _______ from the date of incurring.
(a) one year
(b) five years
(c) same year
(d) three years

Answer

Answer: (c) same year


Question 2.
In the notes to accounts, share capital in which company has not called the entire face value of shares is shown under the notes to accounts.
(a) Subscribed and fully paid up capital
(b) Subscribed but not fully paid up capital
(c) Reserve Capital
(d) None of these

Answer

Answer: (b) Subscribed but not fully paid up capital


Question 3.
The debentures to be redeemed within 12 months from the date of balance sheet is shown under
(a) short term borrowings
(b) long term borrowings
(c) other current liabilities
(d) long term liabilities

Answer

Answer: (c) other current liabilities


Question 4.
Which of the following item will not appear under short term provisions
(a) Provision for tax
(b) Proposed Dividend
(c) Provision for retirement benefits
(d) Provision for doubtful debts

Answer

Answer: (c) Provision for retirement benefits


Question 5.
Capital Reserve will be shown under
(a) current liabilities
(b) share capital
(c) reserves and surplus
(d) deferred tax liabilities

Answer

Answer: (c) reserves and surplus


Question 6.
Dividend is paid on
(a) authorised capital
(b) issued capital
(c) called up capital
(d) paid up capital

Answer

Answer: (d) paid up capital


Question 7.
Which of the following is not required to be prepared under companies act
(a) Statement of Profit and Loss
(b) Balanc Sheet
(c) Cash Flow Statement
(d) Funds Flow Statement

Answer

Answer: (d) Funds Flow Statement


Question 8.
Goodwill appears in a company’s balance sheet under
(a) Unamortised assets
(b) Non-current investments
(c) Intangible assets
(d) Tangible assets

Answer

Answer: (c) Intangible assets


Question 9.
Which of the following is not required to be prepared under companies act
(a) Statement of Profit and Loss
(b) Balance Sheet
(c) Cash Flow Statement
(d) Funds Flow Statement

Answer

Answer: (d) Funds Flow Statement


Question 10.
Claims against the company not acknowledged as debts is shown under
(a) current liabilities
(b) non-current liabilities
(c) commitments
(d) contintent liabilities

Answer

Answer: (d) contintent liabilities


Fill in the Blanks with correct word:

Question 11.
The balance sheet of company is prepared under schedule _______ part __________.

Answer

Answer: III,I


Question 12.
The financial statements are prepared under the provisions of Companies Act, ______.

Answer

Answer: 2013


Question 13.
Schedule VI has been replaced with schedule _______ in the new company law.

Answer

Answer: III


Question 14.
Balance sheet of a company can be prepared only in ______ form.

Answer

Answer: Vertical


Question 15.
The new Companies Act has replaced the concept of ______ with ________ to Accounts.

Answer

Answer: Schedules,notes


Question 16.
Cash and Cash Equivalents will be shown under ________.

Answer

Answer: Current assests


Question 17.
Dr. balance of Statement of Profit and Loss is shown under _______ as ________ item.

Answer

Answer: Reserves and surplus,Negative


Question 18.
Discount on issue of debentures to be written off after 12 months from the reporting date of balance sheet are shown under ________.

Answer

Answer: Non current assests


Question 19.
Share capital consist of _________ share capital and ________ share capital.

Answer

Answer: Equity,preference


Question 20.
Long term provisions are expected to be settled _________ 12 months after the reporting date of balance
sheet.

Answer

Answer: Beyond


State whether the following statements are true or false:

Question 21.
Bank charges are shown under finance costs.

Answer

Answer: False


Question 22.
Share forfeiture account is shown under subscribed capital but fully paid up.

Answer

Answer: False


Question 23.
Money received against share warrants is shown under the heading reserves and surplus.

Answer

Answer: False


Question 24.
Statement of profit and loss carrying positive value or negative value, is always shown under Reserves and Surplus.

Answer

Answer: True


Question 25.
Trade payables does not include sundry creditors.

Answer

Answer: False


Question 26.
Interest received by non-finance Company is shown under revenue from operations.

Answer

Answer: False


Question 27.
Sale of scrap in case of manufacturing company is a part of revenue from operations.

Answer

Answer: True


Question 28.
Calls in advance is shown under other current liabilities.

Answer

Answer: True


Question 29.
Discount allowed to receivables is shown under the heading finance costs.

Answer

Answer: False


Question 30.
Call in arrears are shown as other current assets as it is the amount receivable.

Answer

Answer: False


One word Questions:

Question 31.
State the importance of financial analysis for labour unions. (CBSE SP 2019-20)

Answer

Answer: Labor unions analyse the financial statements to assess whether an enterprise can increase their pay.


Question 32.
If operating is not given, what is the time for the operating cycle assumed?

Answer

Answer: 12 months.


Question 33.
If the operating cycle is given for 12 months and the payment cycle for trade payables is 15 months, how will you classify the liability?

Answer

Answer: Non-current Liability.


Question 34.
Name any one line item that can be shown under the major heading ‘Equity and Liabilities’ in a company’s Balance Sheet.

Answer

Answer: Shareholders’Funds


Question 35.
Name any one item that can be disclosed under ‘Short Term Provisions’.

Answer

Answer: Provision for Doubtful debts.


Question 36.
How would you treat preliminary expenses?

Answer

Answer: Preliminary expenses are written off in the year in which they are incurred.


Question 37.
Give one example of unamortised expenses.

Answer

Answer: Discount on issue of shares / debentures.


Question 38.
State any one component of shareholders’ funds.

Answer

Answer: Reserves & Surplus.


Question 39.
How would you treat share forfeiture account?

Answer

Answer: Added in the subscribed.


Question 40.
Mention one component of Reserves and Surplus.

Answer

Answer: Securities Premium Reserves.


Question 41.
Pratiksha Cartons Limited has given guarantee of ? 75,00,000 to a bank for raising loans from the bank by its subsidiary’ company. Where will this be shown in books of the company?

Answer

Answer: This will be mentioned in Notes to Accounts.


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Accountancy MCQ Class 12 Part 1 and Accounts MCQ Class 12 Part 2

  1. Accounting for Not for Profit Organisation Class 12 MCQ
  2. Accounting for Partnership: Basic Concepts Class 12 MCQ
  3. Reconstitution of Partnership Firm: Admission of a Partner Class 12 MCQ
  4. Reconstitution of Partnership Firm: Retirement / Death of a Partner Class 12 MCQ
  5. Dissolution of a Partnership Firm Class 12 MCQ
  6. Accounting for Share Capital Class 12 MCQ
  7. Issue and Redemption of Debentures Class 12 MCQ
  8. Financial Statements of a Company Class 12 MCQ
  9. Analysis of Financial Statements Class 12 MCQ
  10. Accounting Ratios Class 12 MCQ
  11. Cash Flow Statement Class 12 MCQ
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