RBSE Solutions Class 12 Accountancy Chapter 6 Introduction of Financial Statement of Companies

RBSE Class 12 Accountancy Chapter 6 Textbook Questions

RBSE Class 12 Accountancy Chapter 6 Multiple Choice Questions

Question 1. Financial statements are prepared at the time of:
(a) inception of business
(b) end of accounting year
(c) winding up of business
(d) None of the options
Answer: (b) end of accounting year
In simple words: Financial statements are always made at the end of the accounting period, usually a year, to show how the business performed.

🎯 Exam Tip: Remember that financial statements give a snapshot of the business's health at a specific point in time, usually the financial year-end.

Question 2. The main purpose of financial statements is to show the financial position of a company:
(a) To show current financial position
(b) To show the future financial position
(c) To show past and present financial position
(d) None of the options
Answer: (c) To show past and present financial position
In simple words: Financial statements help us understand how a company has been doing and how it stands financially right now.

🎯 Exam Tip: Financial statements are historical documents that also give insights into the current standing, useful for making future decisions.

Question 3. For which of the following company, it is necessary to prepare cash flow statement?
(a) inactive company
(b) public company
(c) one person company
(d) small company
Answer: (b) public company
In simple words: Public companies are required to prepare a cash flow statement to show how money is coming in and going out of the business.

🎯 Exam Tip: Public companies have stricter reporting requirements because they deal with money from many shareholders, making transparency important.

Question 4. Owners of the company are :
(a) shareholders
(b) loan providers
(c) creditors
(d) All of the options
Answer: (a) shareholders
In simple words: Shareholders are the actual owners of a company because they buy shares, representing a part of the company's ownership.

🎯 Exam Tip: Always distinguish between owners (shareholders), lenders (loan providers), and suppliers (creditors) in accounting.

Question 5. Financial statements are useful for :
(a) employees
(b) managers
(c) shareholders
(d) All of the options
Answer: (d) All of the options
In simple words: Financial statements help many different groups like employees, managers, and shareholders to understand the company's financial health and make informed decisions.

🎯 Exam Tip: Financial statements serve various stakeholders, not just owners, providing insights for different decision-making needs.

Question 6. For a company financial year ends :
(a) 31st March
(b) 31st December
(c) 30th June
(d) 30th September
Answer: (a) 31st March
In simple words: In India, most companies follow a financial year that ends on March 31st. This is the common practice for reporting financial results.

🎯 Exam Tip: Be aware that while March 31st is common in India, other countries or specific companies might use different financial year-ends.

Question 7. General reserves will be shown under which head of the Balance Sheet?
(a) Short Term Provisions
(b) Share Capital
(c) Miscellaneous Expenses
(d) Reserves and Surplus
Answer: (d) Reserves and Surplus
In simple words: General reserves are funds kept aside from profits for future use, and they are shown under the 'Reserves and Surplus' section in the Balance Sheet.

🎯 Exam Tip: Know the main heads and sub-heads of a Balance Sheet to correctly classify all items.

Question 8. Number of main heads under 'Equity and Liabilities' part of Balance Sheet of a company is :
(a) 1
(b) 2
(c) 3
(d) 4
Answer: (d) 4
In simple words: The 'Equity and Liabilities' side of a company's Balance Sheet has four main sections for grouping different types of funds and obligations.

🎯 Exam Tip: Familiarize yourself with the structure of Schedule III of the Companies Act, 2013, which specifies the format of financial statements.

Question 9. When accounting income exceeds taxable income, it leads to :
(a) deferred tax liability
(b) deferred tax assets
(c) long term loan
(d) None of the options
Answer: (a) deferred tax liability
In simple words: If a company's profit shown in its books is more than the profit it pays tax on, it means it will have to pay more tax later, which is called a deferred tax liability.

🎯 Exam Tip: Understand the difference between accounting income (as per financial statements) and taxable income (as per tax laws) to grasp deferred taxes.

Question 10. Which of the following is not employee benefits expenses?
(a) salary
(b) Depreciation
(c) wages
(d) bonus
Answer: (b) Depreciation
In simple words: Employee benefits expenses are costs related to employees, like salary or wages. Depreciation is the cost of using assets, not a benefit for employees.

🎯 Exam Tip: Carefully identify expenses directly linked to employees versus other operational costs when classifying items.

RBSE Class 12 Accountancy Chapter 6 Very Short Answer Questions

Question 1. What is meant by financial statements?
Answer: Financial statements are the final outputs of the accounting process. They provide important information about a business's financial performance and its financial position. These statements act as a report card for the company's financial health.
In simple words: Financial statements are reports that show how much money a business made and what it owns and owes.

🎯 Exam Tip: Always mention both profitability (how much profit it made) and financial position (what it owns and owes) when defining financial statements.

Question 2. Name the two financial statements prepared by a company.
Answer: The two main financial statements that a company prepares are:
• Balance sheet
• Profit and Loss statement.
In simple words: Companies prepare a Balance Sheet and a Profit and Loss Statement.

🎯 Exam Tip: These two statements are fundamental; the Balance Sheet shows assets, liabilities, and equity at a point in time, while the Profit and Loss Statement shows revenue and expenses over a period.

Question 3. Write the name of the major heads of the assets of the balance sheet of a company.
Answer: The major heads for assets on a company's balance sheet are:
• Non-Current Assets
• Current Assets
In simple words: Assets are mainly grouped into long-term (Non-Current) and short-term (Current) categories on the balance sheet.

🎯 Exam Tip: Remember that Non-Current Assets are held for long-term use, while Current Assets are expected to be converted to cash or used up within one year or one operating cycle.

Question 4. Why are financial statements called as historical document?
Answer: Financial statements are called historical documents because they provide information about events and transactions that have already happened in the past. They reflect the financial activities of a completed period.
In simple words: Financial statements are called historical because they show what happened financially in the past.

🎯 Exam Tip: Emphasize that financial statements report on *past* performance, even though they help in *future* decision-making.

Question 5. What is operating cycle?
Answer: The operating cycle is the time it takes for a company to buy raw materials, convert them into finished goods, sell those goods, and then collect the cash from those sales. It represents the full process from acquiring resources to getting cash back.
In simple words: The operating cycle is how long it takes for a business to turn its raw materials into cash after selling products.

🎯 Exam Tip: The operating cycle is crucial for classifying assets and liabilities as current or non-current, as it often determines the short-term vs. long-term horizon.

Question 7. What is meant by statement of profit and loss?
Answer: A statement of profit and loss is a financial statement that shows a company's revenues and expenses over a specific accounting period. It helps to calculate the net profit or loss and indicates whether the business is performing well financially during that period.
In simple words: A profit and loss statement shows if a business made a profit or a loss over a certain time by listing its income and costs.

🎯 Exam Tip: Remember that the Profit and Loss statement (also called Income Statement) covers a *period* (e.g., a year), while the Balance Sheet is at a *point* in time.

Question 8. What is meant by current liabilities?
Answer: Current liabilities are obligations that a company expects to settle within its normal operating cycle or within 12 months from the reporting date, whichever is longer. These include amounts due for trade (like bills payable) and other short-term debts. Specifically, they are liabilities which are:
(a) expected to be settled in company's normal operating cycle.
(b) due to be settled within 12 months after the reporting date.
(c) held primarily for the purpose of being trade.
(d) there is no unconditional right to defer settlement for at least 12 months after the reporting date.
In simple words: Current liabilities are debts a company has to pay back quickly, usually within a year.

🎯 Exam Tip: The key differentiator for current liabilities is their short-term nature and the expectation of settlement in the near future, typically within a year.

Question 9. How are calls-in-arrears shown in balance sheet?
Answer: Calls-in-arrears are amounts that shareholders owe to the company for shares they have subscribed to but have not yet paid for. On the balance sheet, these calls-in-arrears are shown by deducting them from the subscribed capital within the 'Share Capital' section.
In simple words: Unpaid money from shareholders for shares is subtracted from the total subscribed capital on the balance sheet.

🎯 Exam Tip: Always show calls-in-arrears as a deduction from subscribed capital to reflect the true amount of capital received by the company.

Question 10. What is meant by 'share application money, pending allotment'?
Answer: 'Share application money, pending allotment' refers to the money a company receives from people who apply for shares. However, at the time the balance sheet is prepared, the company has not yet officially given (allotted) the shares to these applicants. This amount is shown as a separate item on the balance sheet.
In simple words: This is money received from people applying for shares, but the shares have not been officially given to them yet by the date of the balance sheet.

🎯 Exam Tip: This item is a temporary liability; it will either become part of share capital once shares are allotted or be refunded if shares are not allotted.

RBSE Class 12 Accountancy Chapter 6 Short Answer Questions

Question 2. Write main characteristics of financial statements.
Answer: The main characteristics of financial statements are:
• Financial statements show past information, making them historical documents.
• All the information in financial statements is expressed in terms of money.
• They reveal a company's profitability and financial health through the profit and loss statement and the balance sheet.
In simple words: Financial statements tell us about past money matters and show if a company is making profit and how financially strong it is.

🎯 Exam Tip: Focus on the key attributes: historical data, monetary expression, and reflection of profitability and position.

Question 3. Write four objectives of financial statements.
Answer: Four key objectives of financial statements are:
• To provide financial data about a company's assets and liabilities.
• To show a true and fair picture of how well the business performed financially.
• To help in making future plans, decisions, and business activities.
• To help estimate future profits and allow for comparison and evaluation of the balance sheet, profit and loss statement, and financial activities.
In simple words: Financial statements help show a company's financial status, how it performed, and helps in making future business plans and decisions.

🎯 Exam Tip: When listing objectives, remember they serve to inform, evaluate performance, and aid in future planning.

Question 4. What is meant by current assets ?
Answer: Current assets are assets that a company expects to convert into cash, sell, or use up within one year or one operating cycle, whichever is longer. These assets are important for a company's day-to-day operations and short-term liquidity.
In simple words: Current assets are things a company owns that can be turned into cash or used up quickly, usually within a year.

🎯 Exam Tip: Focus on the 'one year or operating cycle' rule to correctly identify and classify current assets.

Question 5. Explain meaning of trade receivables.
Answer: Trade receivables are amounts that a company is owed by its customers for goods sold or services provided during its regular business operations. These are considered current assets if the company expects to collect the money within 12 months from the balance sheet date or within its operating cycle.
In simple words: Trade receivables are money that customers owe to a business for things they bought on credit.

🎯 Exam Tip: Trade receivables primarily arise from core business activities (selling goods/services on credit) and are typically short-term in nature.

Question 6. Write four items under the head of ‘Reserves and Surplus' of Balance Sheet.
Answer: Four items that typically fall under the 'Reserves and Surplus' head of a Balance Sheet are:
1. Capital Reserve
2. Security Premium
3. Capital Redemption Reserve
4. Debenture Redemption Reserve
In simple words: The 'Reserves and Surplus' section includes funds like Capital Reserve, Security Premium, Capital Redemption Reserve, and Debenture Redemption Reserve.

🎯 Exam Tip: Memorize the common components of 'Reserves and Surplus' as they are frequently tested for classification.

Question 7. What is 'share options outstanding account'? Explain.
Answer: The 'Share Options Outstanding Account' is a special reserve created to record the difference between the market value and the lower issue price of shares given to employees under an Employee Stock Option Scheme (ESOS). For example, if shares are offered to employees at Rs 60 when their market price is Rs 100, the Rs 40 difference per share is credited to this account.
In simple words: This account holds the value difference when a company sells shares to employees at a cheaper price than their market value.

🎯 Exam Tip: Understand that this account reflects the "cost" of providing a benefit to employees through discounted shares, which is an expense for the company.

Question 8. Write the names of five sub-heads comparing under the heads 'Non-Current Assets'.
Answer: Five common sub-heads under 'Non-Current Assets' are:
1. Property, Plant and Equipment (Fixed Assets)
2. Intangible Assets (like Goodwill, Patents)
3. Non-Current Investments
4. Long-term Loans and Advances
5. Deferred Tax Assets
In simple words: Non-current assets include things like land, buildings, machinery, patents, long-term investments, and long-term loans given to others.

🎯 Exam Tip: Remember that non-current assets are those not intended for sale and expected to provide benefits for more than one operating cycle or year.

Question 9. Explain cash equivalents.
Answer: Cash equivalents are short-term, highly liquid investments that can be easily converted into a known amount of cash and carry a very low risk of changes in their value. An investment is considered a cash equivalent only if its original maturity period is three months or less from the date it was acquired.
In simple words: Cash equivalents are investments that can quickly be turned into cash and are very safe, like short-term bank deposits.

🎯 Exam Tip: The key criteria for cash equivalents are high liquidity (easy conversion to cash) and short maturity (usually three months or less).

RBSE Class 12 Accountancy Chapter 6 Essay Type Questions

Question 1. What do you mean by financial statements? Describe characteristics and objectives of these.
Answer:
Meaning of Financial Statements: Financial statements are the final outputs of the accounting process. They provide important information about a business's financial performance (profitability) and its financial position (assets, liabilities, and equity). These statements serve as a complete financial report of the company.

As per Section 2 (40) of the Companies Act, 2013, "Financial Statements" for a company include the following:
1. A Balance Sheet at the end of the financial year.
2. A Statement of Profit and Loss for the financial year.
3. A Cash Flow Statement for the financial year.
4. A Statement of Changes in Equity, if applicable.
5. Explanatory Notes (Notes to Accounts).

Characteristics of Financial Statements:
1. Financial statements relate to past periods, so they are historical documents.
2. All information in them is expressed in monetary terms.
3. They show the company's profitability through the Statement of Profit and Loss and its financial position through the Balance Sheet.

Objectives of Financial Statements:
1. To present a true and fair view of the financial performance (profit/loss) of the business.
2. To present a true and fair view of the financial position (assets, equity, and liabilities) of the business.

Legal Requirements for Financial Statements (Section 129 (1) of the Companies Act, 2013):
• They must give a true and fair view of the company's affairs.
• They must follow the accounting standards notified under Section 133.
• They must be in the specific format given in Schedule III of the Companies Act, 2013.

One Person Companies, small companies, and dormant companies are exempt from preparing a cash flow statement with their financial statements.
In simple words: Financial statements are reports showing a company's past money performance and current financial health. They include the Balance Sheet and Profit & Loss Statement, among others. They help show a true picture of the business and follow specific rules.

🎯 Exam Tip: For essay questions, ensure you address all parts of the question (meaning, characteristics, and objectives) and provide statutory references if relevant.

Question 2. What do you mean by balance sheet ? Give its format.
Answer:
Meaning of Balance Sheet: A Balance Sheet is a financial statement that provides a summary of a company's assets, liabilities, and equity (shareholders' funds) at a very specific point in time. These three parts show what the company owns (assets) and what it owes to others (liabilities and equity). While it follows similar principles as for sole proprietorships, its presentation for companies is different, adhering to a prescribed format.

A company's Balance Sheet is prepared according to the format specified in Schedule III, Part I, of the Companies Act, 2013.

Format of Balance Sheet (as per Schedule III, Part I, Companies Act, 2013)
Name of the Company
Balance Sheet as at...

🎯 Exam Tip: Practice drawing the balance sheet format with all main heads and sub-heads as per Schedule III to score well in structural questions.

Question 3. What is meant by profit and loss statement? Give its format.
Answer:
Meaning of Profit and Loss Statement: The Statement of Profit and Loss, also known as the Income Statement, is a financial report that shows a company's financial performance over a specific accounting period. It helps in calculating the net profit or loss by listing all revenues earned and expenses incurred. This statement is essential for understanding whether the business operations are successful.

The format for the Statement of Profit and Loss is specified in Schedule III, Part II, of the Companies Act, 2013.

Format of Statement of Profit and Loss (as per Schedule III, Part II, Companies Act, 2013)
Name of the Company
Statement of Profit and Loss for the year ended...

🎯 Exam Tip: Ensure you clearly differentiate between 'revenue from operations' and 'other income', and categorize all expenses correctly in the profit and loss statement.

Question 4. Explain contingent liabilities and commitments.
Answer:
(i) Contingent Liabilities: These are potential obligations that might arise depending on the outcome of a future event. They are not definite liabilities because their existence depends on something happening or not happening. For instance, if a company faces a lawsuit, the liability to pay damages is contingent on the court's decision. Contingent liabilities are not recorded in the main accounts but are disclosed in the notes to the financial statements for users to be aware of. They can be classified into:
(a) Claims against the company not acknowledged as debt.
(b) Guarantees given by the company.
(c) Other money for which the company is contingently liable.

(ii) Commitments: Commitments are agreements to perform a particular activity at a certain time in the future under certain circumstances. These are firm intentions or contractual obligations that are not yet liabilities because the transaction has not occurred. For example, a commitment to buy assets at a future date for a specified price. They are also disclosed in the notes to accounts and generally relate to future cash outflows that are unavoidable based on past decisions.
In simple words: Contingent liabilities are possible debts that depend on future events, like winning or losing a lawsuit. Commitments are firm promises to do something in the future, like buying something later. Both are mentioned in notes but are not actual debts yet.

🎯 Exam Tip: Remember that contingent liabilities are *potential* obligations, while commitments are *future* obligations from existing agreements; both are disclosed but not recognized as liabilities until they become certain.

Question 5. Under which heads will you show the following items in the Balance Sheet of a company?
1. Money received against share warrants,
2. Provision for provident fund,
3. Sundry debtors and B/R,
4. Loan repayable on demand,
5. Goodwill, patents and trademarks,
6. Government subsidy reserves,
7. Forfeited shares,
8. Shares options outstanding,
9. Premium on redemption of debentures,
10. Shares in Hindalco Ltd.
Answer:

🎯 Exam Tip: Master the classification of different items under the appropriate main and sub-headings of the Balance Sheet as per Schedule III; this is a common scoring area.

Question 6. Classify the following items under their appropriate Main Heading and Sub Heading in the financial statements:
(3) Revenue from operations : Return,
(4) Trade expenses,
(5) Leave encashment expenses,
(6) Refund of income tax,
(7) Transfer fees,
(8) Loss on sale of investment,
(9) Sale of scrap,
(10) Stores and spares parts used,
(11) Salary and wages,
(12) Manufacturing expenses,
(13) Telephone and internet expenses,
(14) Share issue expenses written off,
(15) Lease rent
Answer:

🎯 Exam Tip: Pay close attention to the nature of each item (e.g., revenue, expense, operating vs. non-operating) to ensure accurate classification in the profit and loss statement.

Question 2. From the following information of Religare Ltd. (a financial company), calculate Revenue from Operations, Other Income and Total Revenue : Profit on Sale of Investments Rs 5,00,000; Profit on Sale of Building Rs 4,50,000; Miscellaneous Income Rs 50,000; Dividend Received Rs 4,00,000; Interest on Loans Rs 25,00,000.
Answer: The financial information for Religare Ltd. is used to prepare the Statement of Profit and Loss. We classify the given items into Revenue from Operations and Other Income to find the total revenue. This is done to show how the company earns money from its main activities and from other sources.

Notes to Accounts :

In simple words: We calculate how much money the company made from its main business activities and from other sources like investments. Then, we add these two parts to get the total money the company earned.

🎯 Exam Tip: Pay close attention to how items are classified. Revenue from Operations relates to core business, while Other Income is from non-core activities like interest or profit on asset sales.

Question 3. The following balances are taken from trial balance of a company : Loan from IDBI Rs 5,00,000; Land and Building Rs 3,70,000; Plant and Machinery Rs 2,58,000; Furniture Rs 45,000; Investments Rs 2,47,000; Dr. Balance of P & L Statement Rs 50,000; Trade Receivables Rs 2,25,000; Inventory Rs 1,75,000; Cash and Cash Equivalents Rs 51,000. You are required to draw up assets side of Balance Sheet as per Companies Act, 2013.
Answer: We prepare the Assets side of the Balance Sheet for the company by listing its assets under Fixed Assets and Current Assets, as required by the Companies Act, 2013. This helps show what the company owns at a specific time.

Notes to Account:

In simple words: We organize all the things the company owns, like buildings and machines, into categories like 'Tangible Assets' and 'Current Assets', and then list their total value. This gives a clear picture of the company's property.

🎯 Exam Tip: Remember to classify assets correctly into main heads (like Fixed Assets and Current Assets) and sub-heads based on the Companies Act, 2013, format. Tangible assets include physical items, while current assets are those expected to be converted to cash within a year.

Question 4. The following balances are taken from trial balance of a company: 1,20,000 Equity Share of Rs 10 each fully called up Rs 12,00,000; Calls-in-arrears on 5,000 shares @ Rs 2 each Rs 10,000; General Reserve Rs 5,80,000; Preliminary Expenses Rs 20,000; Provision for Provident Fund Rs 1,20,000; Trade Payables Rs 3,00,000; Loan from Bank Rs 5,00,000; Provision for Doubtful Debt Rs 40,000. You are required to prepare Equity and Liabilities side of Balance Sheet as per Companies Act, 2013.
Answer: We prepare the Equity and Liabilities side of the Balance Sheet for the company, following the structure given by the Companies Act, 2013. This shows how the company is financed, including money from shareholders and various debts it needs to pay back.

In simple words: This section shows where the company's money comes from, including the money invested by shareholders and various types of debts it has. We subtract any unpaid share amounts and add all reserves to get the full picture.

🎯 Exam Tip: Remember to subtract 'Calls-in-arrears' from the subscribed capital and treat 'Preliminary Expenses' as a deduction from reserves and surplus, as they reduce the overall shareholder's equity.

Question 5. Prepare Notes to Accounts on Employee Benefits Expenses from the following information for the year ended 31 March, 2017: (i) Entertainment Expenses Rs 1,50,000, (ii) Staff Welfare Expenses Rs 2,70,000, (iii) Travelling Expenses Rs 80,000, (iv) Bonus Rs 5,50,000; (v) Salaries Rs 18,70,000; (vi) Wages Rs 25,20,000.
Answer: We prepare a detailed note for 'Employee Benefit Expenses' to show all the costs a company incurs for its employees. This note helps in understanding the total cost related to employees during the year, which is important for financial reporting.

In simple words: We list all the money spent on employees, like their salaries, wages, bonus, and welfare costs. We add them up to find the total expense for employee benefits.

🎯 Exam Tip: Only include direct employee benefits like salary, wages, and bonus in this section. General expenses like entertainment and travelling are usually classified elsewhere.

Question 6. From the following information prepare Balance Sheet of Suzuki Ltd. as at 31st March, 2017 : Share Capital Rs 24,00,000; Deferred Tax Liabilities Rs 60,000; General Reserve Rs 6,00,000; Balance of Statement of Profit & Loss (Cr.) Rs 5,20,000; Tangible Fixed Assets Rs 34,60,000; Trade Receivables Rs 8,00,000; Provision for Doubtful Debts Rs 40,000; Trade Payables Rs 3,20,000; Provision for Tax Rs 80,000; Proposed Dividend Rs 2,40,000.
Answer: We prepare the Balance Sheet for Suzuki Ltd. as of March 31, 2017. This statement lists all the company's assets, liabilities, and equity, showing its financial health on that specific date. It gives a snapshot of what the company owns and owes.

Notes to Accounts:

In simple words: The Balance Sheet shows the total money invested by owners and the money owed to others, matched by the total value of things the company owns. Both sides of the balance sheet must always add up to the same total.

🎯 Exam Tip: Ensure that all liabilities (shareholder funds, non-current, and current) are properly categorized and summed, and that the total liabilities always perfectly match the total assets. Also, remember to detail the calculation of 'Reserves and Surplus' in a separate note.

Question 7. From the following information, prepare statement of Profit & Loss of Shubham Ltd., for the year ending 31 March, 2017: Sales Rs 45,00,000; Cost of Material Consumed Rs 8,00,000; Purchase of Stock-in-Trade Rs 30,00,000; 10% Debentures (Issued on 01-04-2016) Rs 2,00,000; Depreciation on Machinery Rs 50,000; Interest received Rs 60,000; Wages Rs 1,80,000; Salaries Rs 60,000; Sales of Scrap Rs 10,000; Opening Stock-in-Trade Rs 3,00,000.
Answer: We prepare the Statement of Profit & Loss for Shubham Ltd. for the financial year ending March 31, 2017. This statement helps to show how much profit or loss the company has made during the year by comparing its total income with its total expenses. It gives a clear picture of the company's performance.

Notes to Accounts:

In simple words: This statement calculates how much money the company earned and how much it spent. By subtracting all expenses from all income, we find the company's profit for the year, showing if it performed well.

🎯 Exam Tip: When preparing a Profit & Loss statement, ensure you classify all income as either "Revenue from Operations" or "Other Income" and all expenses under appropriate heads like "Cost of Materials Consumed," "Employee Benefits Expense," and "Finance Costs."

Question 8. From the following information, prepare Balance Sheet of Ganesh Ltd as at 31 March, 2017. Fully paid 50,000 Equity Shares Rs 10 each Rs 5,00,000; 25,000 8% Preference Shares Rs 10 each fully paid up Rs 2,50,000; 7% Debentures Rs 5,00,000; Trade Creditors Rs 5,72,500; Cash and Cash Equivalents Rs 1,37,500; Provision for Tax Rs 85,000; Goodwill at Cost Rs 1,25,000; Balance of Statement of Profit & Loss (Cr.) Rs 1,50,000; Provision for Doubtful Debts Rs 10,100; Tangible Fixed Assets at Cost Rs 25,00,000; Other Current Assets KS 3,25,000; General Reserves Rs 10,25,000; Short-term Loans Rs 13,50,000; Long-term Provision for Employees Benefit Rs 1,00,000.
Answer: We prepare the Balance Sheet for Ganesh Ltd. as of March 31, 2017, organizing its financial details into assets, equity, and liabilities. This report shows the company's financial position at a specific point in time, detailing what it owns and what it owes to others and its shareholders.

Notes to Accounts:

In simple words: This financial report lists all the money the company has (assets), where that money came from (equity from owners), and what the company needs to pay back (liabilities). It helps to see if the company is strong and stable.

🎯 Exam Tip: Always verify that the total of Equity and Liabilities matches the total of Assets in the Balance Sheet. This balance is fundamental for correctly representing a company's financial position.