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Accountancy Test - 16
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Accountancy Test - 16
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  • Question 1/10
    5 / -1

    There are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the appropriate option from the options given below

    Assertion (A): Equity shares are those shares which are not preference shares.

    Reason (R): Equity shares are the least issued class of shares and carries the minimum risks and rewards of the business.

    Solutions

    Equity shares are the most commonly issued class of shares and carries the maximum risks and rewards of the business.

  • Question 2/10
    5 / -1

    Which of the following points out the nature of financial statements?

    (i) Financial statements are prepared on the basis of recorded facts.

    (ii) Certain accounting conventions are followed while preparing financial statements.

    (iii) Financial statements are prepared on certain basic assumptions (pre-requisites) known as postulates.

    (iv) Facts and figures presented through financial statements are based on personal opinion, estimates and judgements.

  • Question 3/10
    5 / -1

    Company’s balance sheet should be prepared according the provision of ______ of the of Companies Act, 2013.

    Solutions

    Company’s balance sheet should be prepared according to the provision of Schedule III of the Companies Act, 2013.

    Explanation: Schedule III of the Companies Act, 2013 prescribes the general instructions for the preparation of the balance sheet and statement of profit and loss of a company. It provides the format and guidelines for presenting financial information in a clear and organized manner.

  • Question 4/10
    5 / -1

    Under which of the following head/ sub-head is ‘forfeited shares’ presented in the balance sheet of a company?

    Solutions

    Forfeited shares are shown by adding it to subscribed capital.

  • Question 5/10
    5 / -1

    Preliminary expenses are treated as ‘short-term borrowings’ in the balance sheet of a company.

    Solutions

    They are written-off in the year they are incurred.

  • Question 6/10
    5 / -1

    Which of the following will be included under shareholder’s funds?

    Solutions

    General reserve will be included under reserves and surplus and will be a part of shareholders’ funds.

  • Question 7/10
    5 / -1

    Amount provided for any known liability whose amount as yet is uncertain is known as

    Solutions

    Provision is made to meet a specific liability whose amount cannot be determined with substantial accuracy.

  • Question 8/10
    5 / -1

    Loose tools are shown as non-current assets in the balance sheet of a company.

    Solutions

    Loose tools are shown under the head current assets and sub-head inventories on the assets side of the balance sheet of a company.

  • Question 9/10
    5 / -1

    Which of the following is/are a component of trade payables?

    Solutions

    Trade receivables include both sundry creditors and bill payables.

  • Question 10/10
    5 / -1

    How do financial statements serve purpose of lenders?

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