Financial Statements of a Company Test 12

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Financial Statements of a Company Test 12

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Weekly Quiz Competition

Question 1
1 / -0

Financial statements, provide the necessary information about the performance of the ____________.

A
owner

B
management

C
emplyoee

D
none of the above

Solution

Financial statements provide necessary information about the performance of management. The financial statements show the financial position of an organisation, thereby telling if the policies, procedures and methods used by the management were useful or not.
Question 2
1 / -0

The gaps between the management performance and ownership expectations are understood through _________.

A
cash flow statements

B
financial statements

C
fund flow statement

D
income statement

Solution

The financial statements show the financial position of an organisation, thereby telling if the policies, procedures and methods used by the management were useful or not. They show the gap between the actual performance by the management and the owner's expectation.
Question 3
1 / -0

Following are limitations of financial information ________________.

A
Helps stock exchanges

B
Report on stewardship function

C
Assets may not realise

D
Aids trade associations in helping their members

Solution

Financial statements have a lot of limitations one being that the financial statements show the assets at the historical cost and not the current market price. They do not record the fluctuations in the price, there by the profit or loss from the same is not taken into account.
Question 4
1 / -0

Select the most appropriate alternative from those given below:
_______ is a statement which shows the financial position of business on a specified date.

A
Trading Account

B
Trail Balance

C
Balance Sheet

D
Profit and Loss A/c

Solution

Balance sheet is a statement which shows the financial position of business on a specified date. It shows the balances of assets and liabilities at a particular time, which is at the end of the year. It is one of the main financial statements of the company.
Question 5
1 / -0

From the following __________ limitations of financial statements.

A
bias

B
assets may not realise

C
vital information missing

D
all of the above

Solution

Financial statements are very important for a business but it has many limitations being personal bias, assets may not realise, vital or qualitative information missing. The financial statements may be affected by personal bias as the person making the statements is a human being. Financial statements do not show detailed information about every transaction and they also do not record the qualitative information. The statements only record quantitative information.
Question 6
1 / -0

Select the most appropriate alternative from those given below:
Outstanding expenses are shown on the _______ side of Balance Sheet.

A
liabiltiy

B
asset

C
rigtht

D
both

Solution

Outstanding expenses are the expenses that are due but are yet to be paid. It is an obligation on the part of the company that is to be met. Hence, an obligation is a liability and will appear on liabilities side of the balance sheet.
Question 7
1 / -0

Select the most appropriate alternative from the given below:
Unearned income is shown on _______ side of Balance Sheet.

A
Assets

B
Liabilities

C
Credit

D
Debit

Solution

Income received in advance is a liability because under the accrual concept of accounting income is recorded in the books of accounts when they are earned and not when actually received. Hence, it is an obligation on the part of the company and will be recorded as income as and when it is earned.
Question 8
1 / -0

Profit and loss account discloses the profit/loss for a ___________period.

A
over time

B
specified

C
not specified

D
none of the above

Solution

Profit and loss account discloses the profit/loss for a specified period. The period can be for a year or for a quarter. The Statement of Profit and loss shows the revenues and expenses of the business earned or incurred during the accounting year. The statement helps in understanding the financial position of the business.
Question 9
1 / -0

New Company promoted by persons without any track record can issue shares at ________.

A
$$10$$% premium

B
book building process

C
par

D
any premium

Solution

Issue at par means the face value and the market value is the same. A company may not have a good market value as it is new company, the market value can be lower then the face value also so the company can issue shares at par because discount on issue of shares is not permitted by the companies act 2013.
Question 10
1 / -0

Divisible profits means __________.

A
profit earmarked for some specific purpose

B
profits available for distribution as dividend

C
profit equal to normal profit of the industry

D
$$5\%$$ profit on total capitalization of the company

Solution

Divisible profit means profit or that part of profit that can be used for declaring dividends. General reserve and dividend equalisation reserve is an example of divisible profits.

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Re-Attempt Weekly Quiz Competition

Financial Statements of a Company Test 12

Result

Financial Statements of a Company Test 12

Score

-

Rank

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SHARING IS CARING

Question 1

owner

management

emplyoee

none of the above

Solution

Question 2

cash flow statements

financial statements

fund flow statement

income statement

Solution

Question 3

Helps stock exchanges

Report on stewardship function

Assets may not realise

Aids trade associations in helping their members

Solution

Question 4

Trading Account

Trail Balance

Balance Sheet

Profit and Loss A/c

Solution

Question 5

bias

assets may not realise

vital information missing

all of the above

Solution

Question 6

liabiltiy

asset

rigtht

both

Solution

Question 7

Assets

Liabilities

Credit

Debit

Solution

Question 8

over time

specified

not specified

none of the above

Solution

Question 9

$$10$$% premium

book building process

par

any premium

Solution

Question 10

profit earmarked for some specific purpose

profits available for distribution as dividend

profit equal to normal profit of the industry

$$5\%$$ profit on total capitalization of the company

Solution

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