Financial Statements Questions

Other income of a corporate entity is $\text{Rs. }5,00,000$, which constitutes $25\%$ of its Revenue from Operations. Employees Benefit Expenses are valued at $30\%$ of the Revenue from Operations. Assuming a tax rate of $40\%$, find the Net Profit After Tax (PAT).

Match List - I with List - II.

Choose the correct answer from the options given below:

An old piece of furniture with a book value of $\text{Rs. }10,000$ is sold for $\text{Rs. }7,000$. What amount will be recorded, and on which side, in the Receipts and Payments Account of an NPO?

Net Capital Employed is mathematically equivalent to which of the following expressions?(A) Fixed Assets + Current Assets - Long-term liabilities(B) Non-current Assets + Current Assets - Current liabilities(C) Fixed Assets + Current Assets - Equity(D) Equity + Debt(E) Current Assets - Current liabilitiesChoose the correct answer from the options given below:

Cash equivalents refer to short-term, highly liquid investments that are readily convertible into known amounts of cash. From the elements given below, identify which components are categorized under Cash Equivalents as per AS-3:(A) Demand deposits with Bank(B) Bills receivables(C) Treasury bill(D) Commercial Paper(E) Marketable SecuritiesChoose the correct answer from the options given below:

Calculate the total cost of medicines consumed during the financial year 2020-21 based on the following information:

An annual report containing audited accounting statements and operational reviews is officially furnished by a company to its:

Identify which of the following items are classified under Current Liabilities in a corporate Balance Sheet as per Schedule III of the Companies Act, 2013:(A) Trade receivables(B) Unclaimed dividend(C) Interest accrued but not due on loan(D) Acceptances(E) $12\%$ debentures redeemable after four yearsChoose the correct answer from the options given below:

Common-Size Statements, which analyze financial statements by converting each line item into a percentage of a common base item, are also known as:

If a designated Fund balance such as a "Tournament Fund" exists in the books of a Non-Profit Organisation (NPO), then the explicit expenses incurred on executing such tournament activities must be shown:

Match List - I with List - II.

Choose the correct answer from the options given below:

Identify the transaction from the options below that involves an actual inflow or outflow of cash/cash equivalents:

A company acquires machinery worth $\text{Rs. }5,00,000$. It pays $50\%$ of the amount immediately by cheque and executes a bond for the remaining balance. Determine the net cash impact and the nature of the activity for the Cash Flow Statement:

Identify the odd item out when calculating Cash Flow from Financing Activities:

Aradya Ltd. maintains a Debt-Equity ratio of $2.5:1$. Which of the following transactions will not affect its Debt-Equity Ratio?

Purchase of goodwill is considered in _______ activity while making Cash Flow Statement.

[Context based on Hero Ltd.] Hero Ltd. decided to issue $5,00,000$ shares of $\text{Rs. } 10$ each at a premium of $\text{Rs. } 2$ per share (issue price $\text{Rs. } 12$).The amount collected as Security Premium Reserve will be shown under which cash flow activity?

Common Size Statements are also known as:

[Context based on Hero Ltd.] Dividend paid by TATA Ltd. is categorized under which activity for TATA Ltd. itself?

[Context based on Hero Ltd.] Hero Ltd. issued shares and made investments, including buying $10,000$ shares of TATA Ltd. At the end of the year, TATA Ltd. paid $\text{Rs. } 10,000$ as a dividend to Hero Ltd.Dividend received by Hero Ltd. would be classified under which activity?

Financial Statements of a company do not include:

[Context based on Hero Ltd.] Hero Ltd. undertook the following investment activities:Purchased Building: $\text{Rs. } 10,00,000$Purchased Furniture: $\text{Rs. } 7,00,000$Purchased Machinery: $\text{Rs. } 2,00,000$Purchased shares of TATA Ltd. ($10,000 \text{ shares} \times \text{Rs. } 10$ face value): $\text{Rs. } 1,00,000$Dividend received from TATA Ltd.: $\text{Rs. } 10,000$What is the net Cash flow from investing activities?

Cash Advance and Loan made to a third party (other than made by a financial enterprise) is classified as:

Match List I with List II:

Choose the correct answer from the options given below:

Interest paid on debentures by a manufacturing company would be:

The term Financial Analysis includes:

The ratios calculated to measure the short term commitments of business is:

Identify the Cash Outflow from Financing Activity:

Match List I with List II:

Choose the correct answer from the options given below:

Which of the following transactions will increase the Current Ratio but will decrease the Debt Equity Ratio?

The comparative financial statements show:

The commonly used Techniques of financial Statements Analysis includes :(A) Common size statements(B) Ratio Analysis(C) Trend Analysis(D) Capital Budgeting StatementChoose the correct answer from the options given below :

What is Gross Profit Ratio if?Total sales Rs. $6,00,000$ Sales returns Rs. $50,000$ Cost of goods sold Rs. $4,40,000$

Long-term solvency is indicated by:

Which of the following is not included in Non-current liabilities, while preparing a Balance Sheet of a company :

Operating Profit Ratio of XYZ Ltd. is $60\%$. The operating ratio of XYZ Ltd. is:

Financial statements are:

Cash flow statement helps in which form of financial planning?

Earning Capacity of a Company is measured by:

If the net operating profit of the business is Rs. $90,000$ and the debtors have decreased during the year by Rs. $40,000$. Cash from operations is:

How sale of equipment Rs. $90,000$ (Book value Rs. $1,00,000$) should be shown in the cash flow statement?

Sale of copy rights are considered as a part of

If there is Revenue from Operation Rs. $1,20,000$ and gross profit is $20\%$ of cost, then the amount of gross profit will be :

In common size statement, if revenue from operations are Rs. $23,00,000$ and other incomes are Rs. $3,00,000$, then the percentage of 'Total Revenue from Operations' to 'Revenue from operations' will be:

Match List - I with List - II

Choose the correct answer from the options given below:

Payment made for stationary during the year 2021 - 22 is Rs. 46,000.Stock of stationary as on 1-4-2021 Rs. 8,000Stock of stationary as on 31-3-2022 Rs. 6,000Advance for stationary as on 1-4-2021 Rs. 18,000Advance for stationary as on 31-3-2022 Rs. 5,000What will be the amount of stationary consumed during the year 2021 - 22?

Comparative Statements are also known as:

Income and Expenditure Account is prepared on (a)_________ basis, while Receipts and Payments Account is prepared on (b)_________ basis.

The Receipts and Payments Account of Lead Sports Club showed payment for sports materials as Rs. 46,000 for the year ended 31st March 2022.
Additional Information provided is as follows:

Calculate the amount of Sports Materials consumed during the year ended 31st March 2022.

Which among the following items appear in the Receipt and Payment Account ?(A) Life membership fees(B) Depreciation of fixed assets(C) Provision of doubtful debts(D) Profit/loss on sale of fixed assetsChoose the correct answer from the options given below :

Match List I with List II

Choose the correct answer from the options given below:

On 1st April 2020, the balance of furniture of ABC Ltd. was Rs. 20,000. During the year furniture costing Rs. 4,000 was sold at a gain of Rs. 3,000. Depreciation was charged on it Rs. 5,000. The balance of furniture on 31.3.21 was Rs. 28,000. The amount of furniture purchased was:

Arrange the following items to be in order while making Cash Flow Statement as per AS.3(a) Income Tax paid(b) Purchase of Furniture(c) Goodwill written off(d) Debentures issued(e) Shares purchasedChoose the correct answer from the options given below:

Read the following information to answer.On the basis of case study given below, answer the question which follows:"Mikku on alumni of IIT Delhi, initiated his start-up "Gajanan Ltd.," in the year 2016. His profit in the year 2020-21 after all appropriation was Rs. $6,25,000$. This profit was arrived after taking following items into consideration:ParticularsRs.Loss on Sale of fixed Assets$5,00,000$ Goodwill written off$3,80,000$ Transfer to reserve$3,55,000$ Provision for tax$2,70,000$ Interest on Debentures paid$1,65,000$ Other Details are:Particulars2020 (in Rs.)2021 (in Rs.)Prepaid Expenses$25,000$$10,000$ Accrued interest$40,000$$68,000$ Trade payables$7,00,000$$4,00,000$ Inventories$6,50,000$$5,50,000$ Operating Profit before working capital changes will be Rs. ________

Arrange the following into correct sequence while computing cash flow from operating activities.(a) Compute Net Profit before tax after making necessary adjustments.(b) Compute operating profit before working capital changes by making adjustment for non-cash and non-operating activities.(c) Calculate the difference between opening and closing balance in statement of profit and loss.(d) Compute operating profit by making adjustment for working capital changes.(e) Calculate cash generated/cash used from operating activities by deducting tax paid from operating profit.Choose the correct answer from the options given below:

In the above case study if amount of Goodwill is increasing in current year, then it will be classified in:

Identify the correct sequence to find out profit after tax while preparing comparative income statement A. Deduct expensesB. Find out total revenue by adding other incomes to revenue from operationsC. Find out profit after taxD. Deduct taxE. Calculate profit before tax Choose the correct answer from the options given below:

Identify the limitations of financial statements :A. Can be biasedB. Report on stewardship functionC. Aggregate informationD. Only interim reportsE. Basis of fiscal policiesChoose the correct answer from the options given below:

From the following information of X Ltd, calculate Cash Flow from Financing Activities.ParticularsApril 1, 2021March 31, 2022Long-term Loan2,00,0002,60,000During the year, the company repaid a loan of Rs. $1,00,000$. Long-term loan carried interest rate of $10\%$. The loan was repaid on 1st April 2021 and a fresh loan was taken on 31st March 2022.

Read the following information to answer.On the basis of case study given below, answer the question which follows:"Mikku on alumni of IIT Delhi, initiated his start-up "Gajanan Ltd.," in the year 2016. His profit in the year 2020-21 after all appropriation was Rs. $6,25,000$. This profit was arrived after taking following items into consideration:ParticularsRs.Loss on Sale of fixed Assets$5,00,000$ Goodwill written off$3,80,000$ Transfer to reserve$3,55,000$ Provision for tax$2,70,000$ Interest on Debentures paid$1,65,000$ Other Details are:Particulars2020 (in Rs.)2021 (in Rs.)Prepaid Expenses$25,000$$10,000$ Accrued interest$40,000$$68,000$ Trade payables$7,00,000$$4,00,000$ Inventories$6,50,000$$5,50,000$ Cash from operating activities before tax will be Rs. ________

We add depreciation in order to find out operating profit before working capital changes:

Which one of the following is not true?

Calculate prize fund expenses incurred during the year 2021-22 from the following informationPrize fund as on 1 April, 2021 Rs. $80,000$ Donation received for Prize Fund Rs. $15,000$$10\%$ Prize Fund Investment Rs. $80,000$ Interest Received Rs. $5,000$ Interest Accrued Rs. $3,000$ Prize fund as on 31 March, 2022 Rs. $70,000$

Common size statements are the form of:

Rearrange the following items in a sequence while preparing common size statement.(A) Calculate percentage of the total as per common base(B) Prepare the format of Balance sheet and Profit and Loss A/c(C) List out absolute figures in rupees at two points of time(D) Choose a common baseChoose the correct answer from the options given below :

A low stock turnover ratio indicates:

Which among the following are the non-cash items?A. Deferred TaxB. Goodwill write-offC. DepreciationD. Increase in StockChoose the correct answer from the options given below:

Collections from book debts:

If the net profit earned during the year is Rs. $1,00,000$ and the amount of Bills receivables in the beginning and the end of the year is Rs. $20,000$ and Rs. $40,000$ respectively, then cash flow from operating activities will be:

Which one higher ratio is not favourable?

From the following information of I Ltd., calculate Net Increase / Decrease in cash and cash equivalents during the year 2021-22.i) Cash flow from Operating Activities: Rs. $2,35,000$ ii) Cash used in investing Activities: Rs. $4,35,000$ iii) Cash flow from financing activities: Rs. $2,35,000$

According to AS-3, cash proceeds from issue of share is:

Which among the following are sources of cash inflow from Investing Activities ?(A) Dividend Received from investment(B) Cash Receipt from Disposal of shares(C) Cash Receipt from Disposal of Fixed Assets(D) Cash proceeds from issuing Shares and DebenturesChoose the correct answer from the options given below :

Which one of the following statement is false?

Separate disclosure of cash flows from ________ activities is important because they represent the extent to which expenditure have been made for resources intended to generate future income and cash flows:

Identify the items NOT be shown under Investing Activities while making Cash Flow statement.(a) Proposed Dividend(b) Purchase of non-current Investments(c) Interest paid on long term borrowings(d) Sale of machinery(e) Marketable securities Choose the most appropriate answer from the options given below:

If debentures are converted into equity shares, it is a/an : _____

Calculate Current Ratio from the following given information.Liquid Ratio $0.75:1$ Current Liabilities Rs. 1,80,000Prepaid Expenses Rs. 20,000Inventory Rs. 47,250

X Ltd. has a Current Ratio of $3.5:1$ and Quick Ratio of $2:1$. If excess of current assets over quick assets represented by inventories is Rs. $24,000$. Calculate current liabilities.

The closing balance of Receipts and Payments Account depicts _________.

The ideal Debt Equity Ratio is :

Match List - I with List - II

Choose the correct answer from the options given below:

Following items are categorised under Operating Activities:A. Purchase of GoodwillB. Transfer to General ReserveC. Issue of fresh sharesD. Gain on sale of machineryChoose the correct answer from the options given below:

Make the right combination of the ratios that enables to find the short term liquidity.(a) Return on Equity(b) Acid Test Ratio(c) Current Ratio(d) Sacrificing Ratio(e) Inventory Turnover RatioChoose the most appropriate answer from the options given below:

Match List I with List II in context of cashflow statementLIST IA. Sale of fixed assetB. Purchase of GoodwillC. Tax PaidD. Dividend Paid LIST III. Outflow in operating activitiesII. Inflow in Investing ActivitiesIII. Outflow in Investing ActivitiesIV. Outflow in Financing Activities Choose the correct answer from the options given below:

X Ltd. sold machinery having a book value of Rs. 25,000 (on which accumulated depreciation of Rs. 5,000 had been charged) at a profit of Rs. 3,000. The cash flow from investing activities will be:

Read the following information to answer.On the basis of case study given below, answer the question which follows:"Mikku on alumni of IIT Delhi, initiated his start-up "Gajanan Ltd.," in the year 2016. His profit in the year 2020-21 after all appropriation was Rs. $6,25,000$. This profit was arrived after taking following items into consideration:ParticularsRs.Loss on Sale of fixed Assets$5,00,000$ Goodwill written off$3,80,000$ Transfer to reserve$3,55,000$ Provision for tax$2,70,000$ Interest on Debentures paid$1,65,000$ Other Details are:Particulars2020 (in Rs.)2021 (in Rs.)Prepaid Expenses$25,000$$10,000$ Accrued interest$40,000$$68,000$ Trade payables$7,00,000$$4,00,000$ Inventories$6,50,000$$5,50,000$ Net profit before tax will be Rs. ________

Calculate the amount of cash generated from operations from the following information:

Match List - I with List - II.List - I ||| List - II(A) Operating Activities ||| (I) Issue of equity shares(B) Investing Activities ||| (II) Purchase of Marketable securities(C) Financing Activities ||| (III) Cash sales(D) Cash Equivalent ||| (IV) Purchase of fixed assetsChoose the correct answer from the options given below :

Rathi Udyog, made a profit of 72,000 after changing depreciation of Rs. 17,000 on fixed assets and paid Rs. 10,000 as interim dividend. The goodwill amortized was Rs. 12,000 and profit (Gain) on sale of furniture was Rs. 2,500.The other informations were:Trade Payable showed an increase of Rs. 7,000.Outstanding expenses showed a decrease of Rs. 5,000.Accrued Income showed an increase of Rs. 8,000.Trade payable showed a decrease of Rs. 10,000.Inventories showed a decrease of Rs. 3,000.If from the above informations, cash flow from operating activity is ascertained, then it is ascertained according to Accounting standard:

Read the following information to answer.On the basis of case study given below, answer the question which follows:"Mikku on alumni of IIT Delhi, initiated his start-up "Gajanan Ltd.," in the year 2016. His profit in the year 2020-21 after all appropriation was Rs. $6,25,000$. This profit was arrived after taking following items into consideration:ParticularsRs.Loss on Sale of fixed Assets$5,00,000$ Goodwill written off$3,80,000$ Transfer to reserve$3,55,000$ Provision for tax$2,70,000$ Interest on Debentures paid$1,65,000$ Other Details are:Particulars2020 (in Rs.)2021 (in Rs.)Prepaid Expenses$25,000$$10,000$ Accrued interest$40,000$$68,000$ Trade payables$7,00,000$$4,00,000$ Inventories$6,50,000$$5,50,000$ From among the following, choose the item which would be mentioned in financing activity also:

Find out Net Profit before tax from the above informations:

Match List I with List IILIST I: Major HeadA. Fixed assetsB. Current AssetsC. Current LiabilitiesD. Shareholder's FundsLIST II: Sub HeadI. Short term provisionsII. Money received against share warrantsIII. Non current investmentIV. InventoriesChoose the correct answer from the options given below:

Apart from showing interim dividend in Net Profit before tax, where else it will be shown?

Read the following information to answer.On the basis of case study given below, answer the question which follows:"Mikku on alumni of IIT Delhi, initiated his start-up "Gajanan Ltd.," in the year 2016. His profit in the year 2020-21 after all appropriation was Rs. $6,25,000$. This profit was arrived after taking following items into consideration:ParticularsRs.Loss on Sale of fixed Assets$5,00,000$ Goodwill written off$3,80,000$ Transfer to reserve$3,55,000$ Provision for tax$2,70,000$ Interest on Debentures paid$1,65,000$ Other Details are:Particulars2020 (in Rs.)2021 (in Rs.)Prepaid Expenses$25,000$$10,000$ Accrued interest$40,000$$68,000$ Trade payables$7,00,000$$4,00,000$ Inventories$6,50,000$$5,50,000$ Cash flow from Operating Activities will be Rs. ________

Identify the items not to be shown under Financing activities while making a cash flow statement:A. Payment of dividend and interestB. Interest paid by financial enterpriseC. Redemption of debenturesD. Proceeds from issue of equity sharesE. Loss due to theftChoose the correct answer from the options given below:

If there are Fixed assets of ₹10,00,000, Current assets of ₹6,00,000, Current liabilities of ₹3,00,000 and Net profit before Interest and Tax of ₹2,60,000; then Return on Investment will be:

For calculating EPS, the following order will be followed.(A) Calculate number of equity shares(B) Calculate earning available for equity share holders(C) Compute profit after tax(D) Compute EPSChoose the correct answer from the options given below :

Horizontal analysis is known as:

Make the right combination of ratios that enables to find the short-term liquidity of a firm:A. Return on EquityB. Acid Test RatioC. Sacrificing RatioD. Inventory Turnover RatioE. Current RatioChoose the correct answer from the options given below: