MCQ Questions for Class 12 Accountancy Chapter 3 Financial Statements of a Company

Financial Statements of a Company Class 12 MCQ is one of the best strategies to prepare for the CBSE Class 12 Board exam. If you want to complete a grasp concept or work on one’s score, there is no method except constant practice. Students can improve their speed and accuracy by doing more MCQ of Financial Statements of a Company Class 12 which will help them all through their board test.

Financial Statements of a Company Class 12 MCQ Questions with Answers

Class 12 Accountancy MCQ with answers are given here to chapter the Financial Statements of a Company. These MCQs are based on the latest CBSE board syllabus and relate to the latest Class 12 Accountancy syllabus. By Solving these Class 12 MCQs, you will be able to analyze all of the concepts quickly in the chapter and get ready for the Class 12 Annual exam.

Learn MCQ on Financial Statements of a Company class 12 with answers pdf free download according to the latest CBSE and NCERT syllabus. Students should prepare for the examination by solving CBSE Financial Statements of a Company Class 12 MCQ with answers given below.

Question 1: Reliability of financial analysis depends upon the
a) Reliability of financial data
b) Reliability of Customer
c) Reliability of financial data and Reliability of Customer
d) None of the options

Question 2: The assets held by a business which can be converted in the form of cash, without disturbing the normal operations of a business
a) Current assets
b) Tangible assets
c) Intangible assets
d) Fixed assets

Question 3: Sinking Fund is shown under which subheading
a) Reserve and Surplus
b) Trade Payable
c) Non Current Liabilities
d) None of the options

Question 4: Calls in advance is to be shown under the heading of
a) Current Liabilities
b) Current Assets
c) Current Liabilities and Current Assets
d) None of the options

Question 5: Closing stock is recorded in the
a) Balance sheet
b) Profit and loss account
c) Trial balance
d) None of the options
Answer: Balance sheet

Question 6. Bills Receivables appear in a Company Balance Sheet under the Sub-head
(A) Current Investments
(B) Cash Equivalents
(C) Trade Receivables
(D) Short term Loans and Advances

Question 7: Miscellaneous Expenditure are
a) All of the options
b) Preliminary Expenses
c) Discount allowed on the issue of shares/deb
d) Development expenditure not adjusted

Question 8: Any difference in trial balance transferred to
a) Suspense A/c
b) Capital A/c
c) Current A/c
d) None of the options

Question 9: Those liabilities which may or may not arise as they are dependent on happening in future.
a) Contingent Liability
b) Current Liability
c) Provisions
d) Reserve & surplus

Question 10. Mining Rights are
(a) Tangible Fixed Assets.
(b) Other Current Liabilities.
(c) Intangible Assets Under Development.
(d) Short-term Borrowings.

Question 11. Which of the following is not required to be prepared under the Companies Act
(A) Statement of Profit and Loss
(B) Balance Sheet
(C) Report of Director’s and Auditor’s
(D) Funds Flow Statement

Question 12: Record all the debit balances of real and personal accounts in the
a) Assets side of the balance sheet
b) Liability side of the balance sheet
c) Assets side of the balance sheet and Liability side of the balance sheet
d) None of the options

Question 13: Which are written off every year from the profits earned by the business.
a) Preliminary Expenses
b) Liabilities
c) Preliminary Expenses and Liabilities
d) None of the options

Question 14: The profit & loss statement is also known as the
a) All of the options
b) Income Statement
c) Statement of Earning
d) Statement of Operation

Question 15: There are various external parties who are interested in financial statements
a) Creditors and Investors and Potential Investors
b) Creditors
c) Investors and Potential Investors
d) None of the options

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Question 16: Current Liabilities are those liabilities which are liable to pay with in an operating cycle generally one year
a) Current Liabilities
b) Current Assets
c) Reserves and Surplus
d) None of the options

Question 17: The term current asset doesn t cover
a) Car
b) Debtors
c) Stock
d) Prepaid expenses

Question 18. Which of the following is not a Short-term Borrowing?
(a) Deposits
(b) Loans repayable on demand
(c) Bank Overdraft
(d) Trade Receivables

Question 19: Inventories include the following are
a) All of the options
b) Raw Material
c) Work in progress
d) Goods acquired for trading

Question 20: Which are the determinants of dividend policy
a) All of the options
b) Working Capital Requirement
c) Liquidity Position
d) Legal Requirement

Question 21: Which item is not part of Reserve and Surplus
a) Accumulated Depreciation
b) Capital Reserves
c) General Reserve
d) All of the options

Question 22. While preparing the Balance Sheet of a Company which item is shown under the head ‘Long term Borrowings’?
(A) 6% Debentures
(B) Security Premium Reserve
(C) Trade Payables
(D) None of the above

Question 23. Statement of Profit & Loss – Negative Balance is shown as a minus item under
a) Reserve and Surplus
b) Shareholders Fund
c) Short-term Loan
d) None of the options

Question 24. The accounting equation is
a) Assets= capital + Liabilities
b) Assets= capital – Liabilities
c) Assets= capital + Liabilities and Assets= capital- Liabilities
d) None of the options

Question 25. Financial Statement also called
a) Final Accounts
b) Profit & Loss A/c
c) Trading A/c
d) None of the options

Question 26. ___________ is conducted by the management
a) Internal Analysis
b) External Analysis
c) Internal Analysis and External Analysis
d) None of the options

Question 27. Short-term Borrowings appear in a Company’s Balance Sheet under the head
(A) Current Assets
(B) Current Liabilities
(C) Non-Current Liabilities
(D) Non-Current Assets

Question 28. In a company’s Balance Sheet Provision for Employees Benefits to be settled within 12 months is shown under
(a) Non-current Liabilities.
(b) Current Liabilities.
(c) Non-current Assets.
(d) Current Assets.

Question 29: Salaries outstanding Rs 50,000 will be record in the balance sheet under
a) Other Current Liabilities
b) Other Current Assets
c) Non-current Liabilities
d) All of the options

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