CBSE Class 12 Accountancy Financial Statements of a Company Assignment

OBJECTIVE QUESTIONS 

Question. Which of the following is not a tool of financial analysis :
(A) Comparative Income Statement
(B) Comparative Position Statement
(C) Statement of Profit and Loss
(D) Cash Flow Statement
Answer. Option (C) is correct.

Question. Which of the following is a limitation of financial analysis :
(A) It is just a study of reports of the company.
(B) It judges the ability of the firm to repay its debts.
(C) It identifies the reasons for change in financial position.
(D) It ascertains the relative importance of different components of the financial position of the firm.
Answer. Option (A) is correct.

Question. Which of the following is not a limitation of analysis of financial statements :
(A) Window dressing
(B) Price level changes ignored
(C) Subjectivity
(D) Intra firm comparison possible
Answer. Option (D) is correct.

Question. The most commonly used tools for financial analysis are :
(A) Horizontal analysis
(B) Vertical analysis
(C) Ratio analysis
(D) All of the above 
Answer. Option (D) is correct.

Question. Pick the odd one out :
(A) Horizontal Analysis
(B) Comparative Statement of Profit and Loss
(C) Comparative Balance Sheet
(D) Common-Size Balance Sheet 
Answer. Option (D) is correct.


Question. Consider the following statements given below:
(i) In Common-size Balance Sheet, each item is converted into the percentage of share capital.
(ii) In Common-size Statement of Profit and Loss, each item is converted into the percentage of total expenses.
(iii) In Comparative Statement of Profit and Loss, absolute and percentage change in the items during two periods of time are calculated.
Choose the correct option :
(A) Only (i) is correct
(B) Only (ii) is correct
(C) Only (iii) is correct
(D) All are correct
Answer. Option (C) is correct.

Question. Financial Statements Analysis helps in assessing future trends and thus, helps in forecasting and preparation of _________.
(A) Accounts
(B) Budgets
(C) Reports
(D) Statements
Answer. Option (B) is correct.

Assertion and Reason Based MCQs

Directions: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R).
Mark the correct choice as:
(A) Both (A) and (R) are true, and (R) is the correct explanation of (A).
(B) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is true.

Question. Assertion (A): Financial statements analysis helps in drawing out meaningful conclusions.
Reason (R): Financial Statements Analysis presents financial data in a simplified and understandable form. 
Answer. Option (A) is correct.

Question. Assertion (A): The analysis of financial statements does not disclose the current worth of the business.
Reason (R): Financial statements are prepared on cost principles. 
Answer. Option (A) is correct.

Question. Assertion (A): Comparative statements help in deriving meaningful conclusions regarding the changes in financial position and operating results.
Reason (R): Comparative statements compare financial data of two points of time. 
Answer. Option (A) is correct.
 

Question. Assertion (A): Comparative Balance Sheet provides information regarding progress of the business firm.
Reason (R): The Comparative Balance Sheet shows increase and decrease in absolute terms as well as in percentage in various assets, liabilities and capital. 
Answer. Option (A) is correct.

Case-based MCQs

I. Read the following information and answer the given questions:

Following is the data given of Lalit Ltd.

Question. What is the percentage change in the Revenue from Operations?
(A) 50%
(B) 25%
(C) 30%
(D) 20%
Answer. Option (B) is correct.

Question. What is the percentage change in the Total Revenue earned?
(A) 20.41%
(B) 27.27%
(C) 23.88%
(D) 25.41%
Answer. Option (D) is correct.

Question. What is the change in the profit before tax?
(A) Rs 1,50,000
(B) Rs 1,60,000
(C) Rs 3,10,000
(D) Rs 10,000
Answer. Option (B) is correct.

Question. What is the percentage change in the Total Expenses?
(A) 25%
(B) 24.41%
(C) 27.27%
(D) 23.88%
Answer. Option (C) is correct.

II. Read the following information and answer the given questions:

The following data is available of Pitambar Ltd.

Question. What is the revenue from operations on 31st March, 2020?
(A) Rs 2,00,000
(B) Rs 4,00,000
(C) Rs 3,00,000
(D) None of these
Answer. Option (B) is correct.

Question. What percentage of total revenue is of revenue from operations for 2019?
(A) 100%
(B) 50%
(C) 66%
(D) 150%
Answer. Option (D) is correct.

Question. What is the value of the tax paid by the firm in 2019?
(A) Rs 1,00,800
(B) Rs 81,000
(C) Rs 2,35,000
(D) Cannot be determined from the given data.
Answer. Option (B) is correct.

Question. What is the Net Profit after Tax in March 2020?
(A) Rs 2,35,200
(B) Rs 1,89,000
(C) Rs 2,70,000
(D) Rs 3,36,000
Answer. Option (A) is correct.

III. Read the following information and answer the given questions:

Following information are taken from the books of Agarwal Pvt Ltd.:

Question. What is the value of absolute change in the Total Revenue?
(A) Rs 10,00,000
(B) Rs 40,000
(C) Rs 9,60,000
(D) Rs 9,00,000
Answer. Option (C) is correct.

Question. What is the percentage change in the tax paid?
(A) 5%
(B) 6%
(C) 8%
(D) 7%
Answer. Option (A) is correct.

Question. The absolute change in the Expenses is:
(A) Rs 9,00,000
(B) Rs 60,000
(C) Rs 10,00,000
(D) Rs 12,00,000
Answer. Option (A) is correct.

Question. What is the percentage change in the profit earned after tax?
(A) 40%
(B) 7%
(C) 10%
(D) 5%
Answer. Option (D) is correct.

Very Short Answer Type Questions

Question. Name the statement in which the figure of net sales is assumed to be equal to 100 and all other figures are expressed as percentage of net sales. 
Answer. Common-size Income Statement

Question. Mr. Navratan wants to know the progress of the business firm by considering the change in assets, liabilities and capital on different dates.Suggest him to choose the financial statement analysis tool which will be helpful for him for the above study.
Answer. Comparative Balance Sheet

Question. Identity the tool of financial statement analysis stated below :
It is prepared in such a form so as to reflect the operating activities of the business for two or more accounting periods.
Answer. Comparative Income Statement