Financial Statements Questions

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

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

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).

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

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:

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:

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:

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:

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:

Match List - I with List - II.

Choose the correct answer from the options given below:

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?

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

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

[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?

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

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

[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. 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?

Identify the Cash Outflow from Financing Activity:

[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?

Match List I with List II:

Choose the correct answer from the options given below:

Match List I with List II:

Choose the correct answer from the options given below:

The term Financial Analysis includes:

Interest paid on debentures by a manufacturing company would be:

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

Financial Statements of a company do not include:

Common Size Statements are also known as:

The comparative financial statements show:

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 :

Which one of the following items will be added in debit balance of cash book in the preparation of bank reconciliation statement?

Financial statements are:

The ideal Debt Equity Ratio is :

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. ________

Which one of the following is not true?

Cash from operations will be ifTotal sales Rs. $5,00,000$ Credit sales Rs. $2,25,000$ Total Purchases Rs. $2,48,000$ Credit Purchases Rs. $1,08,000$ Cash Operating expenses Rs. $40,000$

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. ________

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

When the ratio is low, the firm is said to have favourable indication.

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

Match List - I with List - II.List - I ||| List - II(A) Receipts and Payment A/c ||| (I) Special fund(B) Capital receipt ||| (II) Life membership fees(C) Match fund ||| (III) Accrual basis(D) Income and Expenditure A/c ||| (IV) Cash basisChoose the correct answer from the options given below :

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

Match List - I with List - II

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$ Operating Profit before working capital changes will be Rs. ________

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:

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

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.

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:

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:

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:

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:

Find out Net Profit before tax from the above informations:

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

Common size analysis is also known as

Match List I with List IILIST IA. Cash EquivalentsB. Financing ActivitiesC. Operating ActivitiesD. Investing ActivitiesLIST III. Interim Dividend paidII. Selling & Distribution expenses paidIII. Marketable securitiesIV. Dividend received on Shares held as investmentChoose the correct answer from the options given below:

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 :

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. $2,35,000$

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

If a machinery is purchased, how will it be treated while preparing the cash flow statement as per AS-3 (Revised)?

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

Debt-equity ratio is a sub-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 :

Common size statements are the form of:

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.

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

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:

Current ratio is $2:5$, current liabilities Rs. $25,000$, the amount of current assets will be:

Earning Capacity of a Company is measured by:

Which one of the following is not a 'Cash Outflow'?

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 :

Which one of the following activities relate to financing activities?

Match List I with List II

Choose the correct answer from the options given below:

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

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:

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.

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:

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

Match List - I with List - II.List - I ||| List - II(A) Bank overdraft ||| (I) Non cash item(B) Dividend received ||| (II) Financing activity(C) Provision for doubtful debts ||| (III) Operating activity(D) Cash received from sale of goods ||| (IV) Investing activityChoose the correct answer from the options given below :

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:

Comparative Statements are also known as:

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:

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:

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?

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 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

Value of $12\%$ government securities as at 31 March 2021 was Rs. $85,000$ which were purchased at that date at par. Additional $12\%$ securities worth Rs. $50,000$ were purchased on 31 March, 2022. Total interest debited to receipts and payments A/c during the year on the above securities is Rs. $9,000$. calculate Accrued interest on 31 March, 2022.

The closing balance of Receipts and Payments Account depicts _________.

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:

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:

What are the different types of liquidity ratiosA. Interest coverage ratioB. Current ratioC. Inventory turnover ratioD. Gross profit ratioE. Acid test ratio Choose the correct answer from the options given below:

Match List - I with List - II

Choose 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$ From among the following, choose the item which would be mentioned in financing activity also:

From the Receipts and Payments account for the year ending 31.3.22, Locker Rent received is ₹17,050.Additional Information:Locker rent outstanding for the year 2020-21 was ₹3,050.Locker rent outstanding for the year 2021-22 is ₹1,500.Locker rent received in advance at the end of the current year (i.e., on 31.3.22) is ₹1,000.What amount of Locker Rent will be shown in the Income and Expenditure A/c?

Case Study Information:Pragya Madan, an ex-Indian hockey player, decided to start a hockey academy named "Bright Hockey Academy" on 1st April 2022 to train young girls.Her neighbor, Ishwar, died and willed his land to start the academy.Her father, Ramkumar, spent ₹20,00,000 for the construction of a pavilion.100 young girls joined the academy and paid an annual subscription of ₹1,000 each.10 members paid a single amount of ₹25,000 each to obtain life membership.Hockey sticks and balls purchased during the year amounted to ₹27,000. Closing stock of these items is nil.Question: The Life Membership fees received from the 10 members 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 :

Horizontal analysis is known as:

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: