MCQ Chapter 3 Financial Statements of a Company Class 12 Accountancy

Please refer to Financial Statements of a Company MCQ Questions Class 12 Accountancy below. These MCQ questions for Class 12 Accountancy with answers have been designed as per the latest NCERT, CBSE books and syllabus issued for the current academic year. These objective questions for Financial Statements of a Company will help you to prepare for the exams and get more marks.

Financial Statements of a Company MCQ Questions Class 12 Accountancy

Please see solved MCQ Questions for Financial Statements of a Company in Class 12 Accountancy. All questions and answers have been prepared by expert faculty of standard 12 based on latest examination guidelines.

MCQ Questions Class 12 Accountancy Financial Statements of a Company

Question.Claim against the company not acknowledged as debts’ is shown under :
(a) Current Liabilities
(b) Contingent Liabilities
(c) Non-current Liabilities
(d) Capital Commitment

Question. Interest accrued on investments is shown in company’s Balance Sheet under the main head .
(a) Non-current investments
(b) Current assets
(c) Other current assets
(d) Other Non Current assets

Question. Share Capital of a company consists of 70,000 shares of Rs. 10 each, Rs. 8 called up. All the shareholders have duly paid the called up amount. Share capital will be shown as:
(a)Subscribed and fully paid
(b) Subscribed but not yet fully paid
(c) Either (a) or (b)
(d) Neither(a) nor (b)

Question. Which of the following items is shown under the head ‘current assets’ while preparing company’s Balance Sheet ?
(a) Investment in property
(b) Patents
(c) Inventories
(d) Vehicles

Question12%Debentures in a company balance sheet is shown under the sub-head :
(a) Long term provisions
(b) Other current liabilities
(c) Long term borrowings
(d) Other long term liabilities

Question. While preparing the balance sheet of a company, securities premium reserve is shown under :
(a) Non Current liabilities
(b) Share capital
(c) Long term borrowings
(d) Reserves and surplus

Question. 11%Debentures redeemable within 12 months of the date of balance sheet will be shown under:
(a) Short term borrowings
(b) Short terms provisions
(c) Other current liability
(d) Trade payables

Question. Schedule lll has prescribed format for presentation of balance sheet.
(a) Horizontal
(b) Vertical
(c) Either (a) or (b)
(d) Neither (a) nor (b)

Question. Which analysis is considered as dynamic?
(a) Horizontal analysis
(b) Vertical Analysis
(c) Internal Analysis
(d) External Analysis

Question.Call in advance appears in a Company’s Balance sheet under:
(a) Current liabilities
(b) Share Capital
(c) Long term Borrowings
(d) Reserves and Surplus

Question. Analysis of financial statement is significant for:
(a) Creditors
(b)Management
(c) Employees
(d) all of the above

Question. The area of interest for a creditor while analyzing financial statement will be:
(a) Solvency
(b) Liquidity
(c) Profitability
(d) Long term solvency

Question. Bills receivables appears in a company balance sheet under sub head :
(a) Current investments
(b) Trade receivables
(c) Inventories
(d) Cash and cash

Question. Under which tool of Financial Statement Analysis,100% is taken as a base and all other related items are expressed as a percentage of base?
(a) Comparative Statement
(b) Common Size Statement
(c) Ratio analysis
(d) Cash Flow Statement

Question. Which of the following is an objective of Comparative Statement?
(a) To make data simpler and understandable
(b) To help in forecasting
(c) To indicates the trend
(d) All of the above

Question. Earning capacity of a company is ascertained by:
(a) Solvency ratios
(b) Profitability ratios
(c) Liquidity ratio
(d) Working Capital Ratio

Question. Which of the following is not a limitation of Comparative Statement?
(a) Ignores price level changes
(b) Ignores quantitative aspects
(c) Ignores Qualitative aspects
(d) Variation in accounting Policies .

Question. Under the sub head of short – term provision which one is shown from the following :
(a) Interest accrued and due on borrowing
(b) Proposed dividend
(c) unpaid dividend
(d) calls in advance

Question.The following analysis is based on one year data:
(a) Cash flow statement
(b) Dividend analysis
(c) Horizontal analysis
(d) Vertical analysis

Question. In a trading firm, if stock of finished goods held for a month and credit period is 2 months, then operating cycle will be for month/months?
(a) One
(b) Two
(c) Three
(d) Four

Question. In a company’s Balance sheet Provision for Employees Benefits to be settled within 12 months is shown under:
(a) Non currentliabilities
(b) Current liabilities 
(c) Non-currentassets
(d) Current assets

Question. While preparing the Balance Sheet of a company which item is shown under the head ‘Long- term wings’?
(a) 6%Debentures
(b) Security Premium Reserve
(c) Trade Payables
(d) None of the above

Question. A company issued capital. A shareholder paid all money on allotment while first call is not called by company. So you are required to show this advance in balance sheet of a company as
(a) Current Liability
(b) Long-term liability
(c) Current assets
(d) None of the above

Question. Cash and cash equivalent does not include
(a) Cheques
(b) Balance with banks
(c) Bank deposit with more than 12 months maturity
(d) Inventories

Question. Which of the following is not a part of Finance Cost?
(a) Bank charges
(b) Interest paid on debentures
(c) Interest paid on public deposits
(d) Loss on issue of debentures

Question. Unclaimed dividend appears in a company’s Balance Sheet under the sub-head_____________.
(a) Short-term Borrowings
(b) Trade Payables
(c) Other Current Liabilities
(d) Short Term Provisions

Question. Match thefollowing

(i) TradeMarks	(a) Cash and CashEquivalents
(ii) StoresandSpares	(b) Intangibleassets
(iii) Cheque inhand	(c) Inventory

(a) (i)-(c) (ii)-(b)(iii)-(a)
(b) (i)-(c) (ii)-(a)(iii)-(b)
(c) (i)-(b) (ii)-(c)(iii)-(a)
(d) (i)-(a) (ii)-(c)(iii)-(b)

Question. ‘Loose tools’ appears in the company’s Balance Sheet under the head/sub head.
(a) Inventory
(b) Non-current assets
(c) Other current assets
(d) Stores and spares part

Question. If expected period of payment of trade payables is 13 months and operating cycle is 14 months, then it is a .
(a) Current assets
(b) Current liability
(c) Non-current assets
(d) Non-current liability

Question. Inter – Firm Analysis is also known as :
(a) Cross- section Analysis
(b) Trend analysis
(c) Dividend decision Analysis
(d) Debt Analysis

Question. Which of the following is a not limitation of analysis of financial statement?
(a) Window dressing
(b) Subjectivity
(c) Intra-firm comparison
(d) Only quantitative analysis

Question. Intra – Firm Analysis is also known as :
(a) Cross- section Analysis
(b) Trend analysis
(c) Dividend decision Analysis
(d) Debt Analysis

Question. Which of the following items is shown under the heading ‘ Non – Current liabilities ‘ in the balance sheet of a company ?
(a) 12% Debentures
(b) Reserves and surplus
(c) unclaimed dividend
(d) Provision for tax [ a]

Question. Which tool of analysis of financial statements shows a comparative study of items of two or more years :
(a) Ratio analysis
(b) common size statements
(c) comparative statements

Question. It is statement in which each asset is expressed as a percentage to total assets:
(a) Comparative Statement
(b) Common Size Statement
(c) Ratio analysis
(d) Cash Flow Statement

Question. Analysis of the financial statement measures _______

Question. Claims are expected to be settled beyond twelve month or an operating cycle is classified under ________.

Question. Bank overdraft and cash credit in the balance sheet of a company are shown under ____________.

Question. There are ________ major heads on the assets side of a company’s Balance sheet.

Question. When financial statement for a single year is analyzed, it is called _________ analysis.

Question. When financial statement figures for two or more years are compared, it is __________

Question. Assets and liabilities of a company are usually marshaled in the order of _______

Question. In the case of operating cycle cannot be determined then the time period of operating cycle is assumed to be ________ months.

Question. There are __________ major head of the equity and liabilities side of a company’s balance sheet.

Question. Financial statement analysis ignores ________ elements.

Question. The authorized capital is shown by way of information in the notes to accounts. It is not added to the amount of share capital to be showin balance Sheet. True

Question. Contingent liabilities are shown in the balance sheet under the heading Current Liabilities.

Question. Horizontal analysis is useful in long term planning.

Question. Interest accrued and due on debentures is shown under the heading non-current liabilities.

Question.It is compulsory for the directors of a company to present company’s statement of Profit and Loss Account and Balance Sheet in the annual general meeting of shareholders.

Question. Facts and figures presented in financial statement are not at all based on personal judgments.

Question. Financial analysis removes the limitations of financial statements.

Question. Financial analysis ignores qualitative factors.

Question. It is not compulsory for a company to prepare balance sheet as per proforma given in Schedule lll of companies Act, 2013.

Question. Financial statements show price-level changes.