Financial Statements Questions

Which of the following items is not a tool of financial statement analysis?

\textbf{Case Study Description:}Review the Trial Balance and accompanying details provided by a school for the fiscal year ended 31st March 2017:\begin{tabular}{|l|r|l|r|}\hline\textbf{Debit Balance} & \textbf{Amount (Rs.)} & \textbf{Credit Balance} & \textbf{Amount (Rs.)} \ \hlineBuilding & 6,25,000 & Admission fees & 12,500 \ \hlineFurniture & 1,00,000 & Tuition fees received & 5,00,000 \ \hlineLibrary Books & 1,50,000 & Creditors for supplies & 15,000 \ \hlineInvestment @12% & 5,00,000 & Rent for the school hall & 10,000 \ \hlineSalaries & 5,00,000 & Miscellaneous receipts & 30,000 \ \hlineStationery & 40,000 & Government grant & 3,50,000 \ \hlineGeneral expenses & 18,000 & General fund & 10,00,000 \ \hlineSports expenses & 15,000 & Donation for library books & 62,500 \ \hlineCash at bank & 50,000 & Sale of old furniture & 20,000 \ \hlineCash in hand & 2,000 & & \ \hline\textbf{Total} & \textbf{20,00,000} & \textbf{Total} & \textbf{20,00,000} \ \hline\end{tabular}\textbf{Additional Information:}\begin{enumerate}\item Tuition fees outstanding/yet to be received for the year are $\text{Rs. }25,000$.\item Salaries outstanding/yet to be paid amount to $\text{Rs. }30,000$.\item Furniture costing $\text{Rs. }40,000$ was purchased on October 1, 2016.\item The book value of the furniture sold was $\text{Rs. }50,000$ on April 1, 2016.\item Depreciation is to be charged at $10\%\text{ p.a.}$ on furniture, $15\%\text{ p.a.}$ on Library books, and $5\%\text{ p.a.}$ on building.\end{enumerate}Based on the case study data, calculate the closing value of the Building as of 31.03.2017:

\textbf{Case Study Description:}Review the Trial Balance and accompanying details provided by a school for the fiscal year ended 31st March 2017:\begin{tabular}{|l|r|l|r|}\hline\textbf{Debit Balance} & \textbf{Amount (Rs.)} & \textbf{Credit Balance} & \textbf{Amount (Rs.)} \ \hlineBuilding & 6,25,000 & Admission fees & 12,500 \ \hlineFurniture & 1,00,000 & Tuition fees received & 5,00,000 \ \hlineLibrary Books & 1,50,000 & Creditors for supplies & 15,000 \ \hlineInvestment @12% & 5,00,000 & Rent for the school hall & 10,000 \ \hlineSalaries & 5,00,000 & Miscellaneous receipts & 30,000 \ \hlineStationery & 40,000 & Government grant & 3,50,000 \ \hlineGeneral expenses & 18,000 & General fund & 10,00,000 \ \hlineSports expenses & 15,000 & Donation for library books & 62,500 \ \hlineCash at bank & 50,000 & Sale of old furniture & 20,000 \ \hlineCash in hand & 2,000 & & \ \hline\textbf{Total} & \textbf{20,00,000} & \textbf{Total} & \textbf{20,00,000} \ \hline\end{tabular}\textbf{Additional Information:}\begin{enumerate}\item Tuition fees outstanding/yet to be received for the year are $\text{Rs. }25,000$.\item Salaries outstanding/yet to be paid amount to $\text{Rs. }30,000$.\item Furniture costing $\text{Rs. }40,000$ was purchased on October 1, 2016.\item The book value of the furniture sold was $\text{Rs. }50,000$ on April 1, 2016.\item Depreciation is to be charged at $10\%\text{ p.a.}$ on furniture, $15\%\text{ p.a.}$ on Library books, and $5\%\text{ p.a.}$ on building.\end{enumerate}Determine the total Salary Expense to be debited to the Income and Expenditure Account for the year 2016-17:

\textbf{Case Study Description (Questions 41 to 45):}Review the Trial Balance and accompanying details provided by a school for the fiscal year ended 31st March 2017:\begin{tabular}{|l|r|l|r|}\hline\textbf{Debit Balance} & \textbf{Amount (Rs.)} & \textbf{Credit Balance} & \textbf{Amount (Rs.)} \ \hlineBuilding & 6,25,000 & Admission fees & 12,500 \ \hlineFurniture & 1,00,000 & Tuition fees received & 5,00,000 \ \hlineLibrary Books & 1,50,000 & Creditors for supplies & 15,000 \ \hlineInvestment @12% & 5,00,000 & Rent for the school hall & 10,000 \ \hlineSalaries & 5,00,000 & Miscellaneous receipts & 30,000 \ \hlineStationery & 40,000 & Government grant & 3,50,000 \ \hlineGeneral expenses & 18,000 & General fund & 10,00,000 \ \hlineSports expenses & 15,000 & Donation for library books & 62,500 \ \hlineCash at bank & 50,000 & Sale of old furniture & 20,000 \ \hlineCash in hand & 2,000 & & \ \hline\textbf{Total} & \textbf{20,00,000} & \textbf{Total} & \textbf{20,00,000} \ \hline\end{tabular}\textbf{Additional Information:}\begin{enumerate}\item Tuition fees outstanding/yet to be received for the year are $\text{Rs. }25,000$.\item Salaries outstanding/yet to be paid amount to $\text{Rs. }30,000$.\item Furniture costing $\text{Rs. }40,000$ was purchased on October 1, 2016.\item The book value of the furniture sold was $\text{Rs. }50,000$ on April 1, 2016.\item Depreciation is to be charged at $10\%\text{ p.a.}$ on furniture, $15\%\text{ p.a.}$ on Library books, and $5\%\text{ p.a.}$ on building.\end{enumerate}Based on the case study data, calculate the Loss on the sale of old furniture:

Match List I with List II:\begin{tabular}{|l|l|}\hline\textbf{LIST I} & \textbf{LIST II} \ \hlineA. Horizontal Analysis & I. Common-size statement \ \hlineB. Vertical Analysis & II. Comparative statement \ \hlineC. External Analysis & III. Access to all published and unpublished information \ \hlineD. Internal Analysis & IV. Access only to published financial records \ \hline\end{tabular}Choose the correct answer from the options given below:

Match List I with List II: \begin{tabular}{|l|l|}\hline\textbf{LIST I} & \textbf{LIST II} \ \hlineA. Operating Profit Ratio & I. Solvency Ratios \ \hlineB. Working Capital Turnover Ratio & III. Activity Ratios \ \hlineC. Debt-Equity Ratio & III. Activity Ratios \ \hlineD. Quick Ratio & IV. Profitability Ratios \ \hline\end{tabular} Choose the correct answer from the options given below:

Which of the following items are part of Intangible non-current Assets?A. PatentsB. FurnitureC. Statement of Profit & Loss A/c (Dr)D. GoodwillE. TrademarkChoose the correct answer from the options given below:

Arrange the following items in the correct order of presentation within the Statement of Profit and Loss.A. Other incomeB. ExpensesC. Total RevenueD. Revenue from operationsE. Profit before tax and extraordinary itemsChoose the correct answer from the options given below:

Match List I with List II:\begin{tabular}{|l|l|}\hline\textbf{LIST I} & \textbf{LIST II} \ \hlineA. Employee benefit expenses & I. Investing activity \ \hlineB. Dividend received & II. Operating activity \ \hlineC. Loan raised & III. Extraordinary item \ \hlineD. Proceeds from earthquake disaster settlement & IV. Financing activity \ \hline\end{tabular}Choose the correct answer from the options given below:

Match List I with List II regarding corporate accounting classifications under Schedule III of the Companies Act, 2013:List IA. Current Maturities of long term DebtB. Securities PremiumC. Outstanding salariesD. Premium on Redemption of DebenturesList III. Other Non-Current LiabilitiesII. Short term BorrowingIII. Other Current LiabilityIV. Reserves and SurplusChoose the correct answer from the options given below:

Based on the operational data provided below, calculate the net cash paid for inventory during the year:\begin{tabular}{|l|r|}\hline\textbf{Particulars} & \textbf{Amount (Rs.)} \ \hlineInventory at the beginning & 40,000 \ \hlineCredit Purchases & 1,60,000 \ \hlineInventory at the end & 38,000 \ \hlineTrade payables at the beginning & 14,000 \ \hlineTrade payables at the end & 14,500 \ \hline\end{tabular}

The following are items appearing on the Equities and Liabilities side of the Balance Sheet:A. Deferred tax Assets (Net)B. Reserve and SurplusC. Deferred tax Liabilities (Net)D. Long term borrowingsE. Long term loans and AdvancesChoose the correct answer from the options given below:

Match List I with List II:\begin{tabular}{|l|l|}\hline\textbf{LIST I} & \textbf{LIST II} \ \hlineA. Capital Reserve & I. Current Assets \ \hlineB. Inventories & II. Non-Current Liabilities \ \hlineC. $8\%$ Debentures & III. Current Liabilities \ \hlineD. Provision for tax & IV. Reserve and Surplus \ \hline\end{tabular}Choose the correct answer from the options given below:

Arrange the following components in the correct presentation sequence for constructing a Cash Flow Statement (Indirect Method) under AS-3.A. Calculation of cash flow from Operating ActivitiesB. Calculation of cash flow from Financing ActivitiesC. Calculation of net increase/decrease in cash and cash equivalents during the yearD. Calculation of cash flow from Investing ActivitiesE. Calculation of net profit before tax and extraordinary itemsChoose the correct answer from the options given below:

Which one of the following statements is true?

Intangible assets should be recognised by fulfilling the criteria as recognised under:

What will be Interest Coverage Ratio, when $20\%$ Long term Debt is Rs. $10,00,000$, Tax Rate $40\%$ and Net profit After Tax is Rs. $6,00,000$.

Calculate cash flow from financing Activities of X Ltd. which is a financing company.Issue of shares Rs. $1,00,000$ Issue of Bonus shares Rs. $50,000$ Dividend paid Rs. $10,000$ Interest paid Rs. $5,000$

Cave Ltd. made a profit of Rs. $1,50,000$ after charging depreciation of Rs. $30,000$ on assets and a transfer to general reserve of Rs. $30,000$. The Goodwill amortised was Rs. $9,000$ and gain on sale of machinery was Rs. $5,000$. Operating profit before working capital changes will be:

Find out Net Profit before tax from the above informations:

Match the activities in List I with their correct corresponding examples in List II with regard to Cash Flow Statement:List IList IIA. Operating activityI. Raising of loanB. Investing activityII. Current investmentC. Financing activityIII. Selling of investmentD. Cash and Cash equivalentIV. Buying of raw materialChoose the correct answer from the options given below:

Operating Expenses include:A. Rent paidB. Interest paid on loanC. Selling and Distribution ExpensesD. Commission ReceivedE. Salaries PaidChoose the correct answer from the options given below:

Match the items in List I with their appropriate classifications under Schedule III of the Companies Act, 2013 in List II:List I (Items)List II (Classification)A. Shareholders' fundsI. Furniture and FittingsB. Current liabilitiesII. Prepaid expensesC. Current AssetsIII. Calls in AdvanceD. Non-current assetsIV. Surplus of Balance on statement of P and LChoose the correct answer from the options given below:

Operating profit before working capital changes amounted to ₹85,000. The following further information is given:Particulars31.3.2020 (₹)31.3.2019 (₹)Cash36,00030,000Trade receivable18,00012,000Provision for tax9,0008,000Trade payables20,00016,000Bank overdraft18,000-The Net cash flow from operating activities after tax is:

A club has an opening balance of ₹8,50,000 in the Match Fund. Donations received for matches during the current year amounted to ₹4,25,000. Sale of match tickets amounted to ₹1,15,000. Match expenses incurred were ₹14,00,000. The balance in the Match Fund at the year-end will be:

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:

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:

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:

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

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

Which of the following ratios is not a profitability ratio?

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

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:

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:

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

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:

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:

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:

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:

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.

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: Sports material consumed during the financial year 2022-2023 will be:

Match List I with List II as per Statement of Profit and Loss of a company under Schedule III of Companies Act, 2013:List IA. Interest chargesB. Sale of servicesC. SalaryD. Dividend IncomeList III. Employee Benefit ExpensesII. Other IncomeIII. Revenue from OperationsIV. Finance CostChoose the correct answer from the options given below:

A part of fixed Assets costing $\text{Rs. }2,00,000$ (Book value $\text{Rs. }1,50,000$) was sold at a gain of $\text{Rs. }10,000$. How will this transaction affect the cash flow statement?

Capital gains tax paid explicitly on the sale of fixed assets should be classified as a:

W Ltd has given you following information:ItemAmountMachinery (Opening Balance)$\text{Rs. }50,000$ Machinery (Closing Balance)$\text{Rs. }60,000$ Accumulated Depreciation (Opening Balance)$\text{Rs. }25,000$ Accumulated Depreciation (Closing Balance)$\text{Rs. }15,000$ During the year, a machine costing $\text{Rs. }25,000$ with accumulated depreciation of $\text{Rs. }15,000$ was sold for $\text{Rs. }13,000$. Calculate Net Cash Flow from Investing Activities.

Identify the salient features of the Income and Expenditure account from the following:A. It is prepared on an accrual basis.B. It includes both revenue as well as capital items.C. It is prepared after taking into account the additional information regarding outstanding/prepaid expenses and depreciation etc.D. Its result is surplus or deficit.E. It is prepared with the help of the Receipts and Payments Account. Choose the correct answer from the options given below:

Identify the ratio out of the following options which is not computed for evaluating the long-term solvency of a business.

Match List - I with List - II.
$$\begin{array}{ll}\text{List - I (Accounting Ratios)}& \text{List - II (Functional Classification)}\\ \text{(A) Current Ratio}& \text{(I) Solvency Ratios}\\ \text{(B) Inventory Turnover Ratio}& \text{(II) Liquidity Ratios}\\ \text{(C) Return on Investment}& \text{(III) Profitability Ratios}\\ \text{(D) Proprietary Ratio}& \text{(IV) Activity Ratios}\end{array}$$
Choose 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:
$$\begin{array}{lr}\text{Particulars}& \text{Amount (Rs.)}\\ \text{Payment to creditors of medicines}& 3,70,000\\ \text{Creditors for medicines on 01.04.2020 (Opening)}& 25,000\\ \text{Creditors for medicines on 31.03.2021 (Closing)}& 17,000\\ \text{Stock of Medicines on 01.04.2020 (Opening)}& 62,000\\ \text{Stock of Medicines on 31.03.2021 (Closing)}& 54,000\\ \text{Advance to suppliers on 01.04.2020 (Opening)}& 11,000\\ \text{Advance to suppliers on 31.03.2021 (Closing)}& 18,000\end{array}$$

Match List - I with List - II.
$$\begin{array}{ll}\text{List - I}& \text{List - II}\\ \text{(A) The accounting basis for a Cash Flow Statement is}& \text{(I) Investment in shares}\\ \text{(B) Dividend paid on Equity and Preference capital comes under}& \text{(II) Cash Basis}\\ \text{(C) It cannot be considered as cash and cash equivalents}& \text{(III) Treasury bills}\\ \text{(D) It can be classified as cash and cash equivalents}& \text{(IV) Cash outflow from Financing Activities}\end{array}$$
Choose the correct answer from the options given below:

Under Schedule III of the Companies Act 2013, current liabilities do not include:

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 amount of recurring subscription revenue credited to the Income and Expenditure Account during the year will be:

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:

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 accounting treatment for the expenditure incurred on the construction of the pavilion (₹20,00,000) is:

Case Study Information (Questions 41-45):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 land donated by the deceased neighbor Ishwar under his will is classified as:

Match List I with List II regarding accounting ratios and their descriptions:List I (Ratios)List II (Descriptions)A. Debt-Equity RatioI. Primarily indicates the rate of external funds in financing assets.B. Total assets to Debt ratioII. Higher proportion provides security to creditors.C. Proprietary ratioIII. It reveals the efficiency of business in utilization of funds.D. Return on InvestmentIV. It measures the degree of indebtedness of an enterprise.Choose the correct answer from the options given below:

There are 500 members in a Rotary club, each paying ₹1,000 as an annual subscription. During the current financial year, 100 members paid only a partial subscription amounting to ₹80,000 in total. 10 members left without giving any subscription for the year. The actual amount of subscription cash received during the current financial year will be:

If the net profit earned during the year is ₹50,000 and the amount of depreciation charged during the year is ₹15,000, then the cash flow from operating activities (assuming no working capital adjustments) will be equal to ₹ _______.

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?

Which of the following is an inflow of cash in financing activities?