Important Questions for Class 12 Accountancy Financial Statements and Analysis

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Important Questions for Class 12 Accountancy Financial Statements and Analysis. myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. There chapter wise Practice Questions with complete solutions are available for download in myCBSEguide website and mobile app. These test papers with solution are prepared by our team of expert teachers who are teaching grade in CBSE schools for years. There are around 4-5 set of solved Accountancy Extra questions from each and every chapter. The students will not miss any concept in these Chapter wise question that are specially designed to tackle Exam. We have taken care of every single concept given in CBSE Class 12 Accountancy syllabus and questions are framed as per the latest marking scheme and blue print issued by CBSE for class 12.

CBSE Class 12 Accountancy Extra Questions

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Accountancy Test Paper of Class 12

Ch-9 Financial Statements and Analysis


  1. Comparative Financial Statement is an example of
    1. Horizontal analysis
    2. Vertical Analysis
    3. Internal Analysis
    4. External analysis
  2. Name the items under Shareholder’s Fund is comprised of company’s balance sheet.
    1. Money received against share warrant
    2. All of these
    3. Share Capital
    4. Reserves and Surplus
  3. Salaries outstanding ₹55,000 will be record in the balance sheet under ……..
    1. Other Current Liabilities
    2. Short term borrowings
    3. Other Current Assets
    4. Non-current Liabilities
  4. Computer software is shown under the __________
    1. Fixed intangible Assets
    2. Fictitious Assets
    3. Fixed Tangible Assets
    4. Current Assets
  5. An asset shall be classified as current when it satisfies any of the following criteria
    1. It is part of fixed assets
    2. It is an old asset in the firm
    3. It is not the part of business
    4. It is expected to be realized within a year
  6. Why Taxation Authorities and Employees are interested in financial statement analysis?

  7. Name the major headings under which the equity and liabilities side of a company’s Balance Sheet is organized and presented.

  8. Name any five tools of Financial Statement Analysis.

  9. What is meant by Fund?

  10. State the significance of analysis of financial statements to ‘top management’.

  11. Prepare the Common size Balance Sheet and comment on the financial position of K Ltd. and L Ltd. The Balance Sheets of K Ltd. and L Ltd. as at 31.3.2012 are given below:

    ParticularsNote No.K Ltd.L Ltd.
    Figures as at the end of  the current reporting periodFigures as at the end of  the previous reporting periodFigures as at the end  of the current reporting periodFigures as at the end of  the previous reporting period
    I. EQUITY AND LIABILITIES
    Shareholder’s Funds
    Share Capital:3,00,0004,00,000
    Issued and paid up2,00,0003,00,000
    Reserves and Surplus
    Current liabilities
    Short – term Borrowings:1,00,00050,000
    6,00,0007,50,000
    II. ASSETS
    Non – Current Assets
    Fixed Assets4,00,0004,00,000
    Current Assets2,00,0003,50,000
    6,00,0007,50,000
  12. Prepare Common-size Statement of Profit and Loss from the following for the year ended 31st March 2013.

    Particulars(Rs.)
    Revenue from Operations21,00,000
    Cost of Materials Consumed9,90,000
    Other Expenses3,90,000
    Interest on investment80,000
    Tax Payable50%
  13. Balance Sheets of Blue Bell Ltd. as at 31st March 2013 and 2012 are given below :

    Balance Sheet
    as at 31st March 2013 and 2012

    Particulars31st March 2013
    Amount (Rs)
    31st March 2012
    Amount (Rs)
    I.EQUITY AND LIABILITIES
    1. Shareholders’ Funds Share Capital
    Share Capital3,44,0004,26,000
    2. Non-Current Liabilities
    Long-term Borrowings4,38,0006,96,000
    3. Current Liabilities78,0002,98,000
    8,60,00014,20,000
    II.ASSETS
    1. Non-Current Assets
    (a) Fixed Assets4,30,0005,68,000
    (b) Investments4,0006,000
    2. Current assets4,26,0008,46,000
    8,60,00014,20,000

    Prepare Comparative Balance Sheet showing percentage changes from 2012 to 2013.

Ch-9 Financial Statements and Analysis


Answer

    1. Horizontal analysis, Explanation: Comparative financial statement is an example of Horizontal analysis because it requires comparative financial statements of two or more accounting periods.
    1. All of these, Explanation: Shareholders fund is divided into the following parts: Share Capital
      Reserves and Surplus
      Money received against share warrant
    1. Other Current Liabilities
      Explanation: It is a short term liability payable within one year.
    1. Fixed intangible Assets
      Explanation: Computer software is an intangible asset because it is an identifiable non-monetary asset without physical substance.
    1. It is expected to be realized within a year
      Explanation: The life of current assets are less than a year. They gets converted into cash and they keeps rotating several times in a year. Their balance is fluctuating, not fixed. Examples of current assets are, inventories, cash and cash equipments, trade receivables, etc.
  1. Employees are interested in the company’s profitability and stability. They are after the ability of the company to pay salaries and provide employee benefits. They may also be interested in its financial position and performance to assess company expansion possibilities and career development opportunities.The financial statements of a business provide a formal record of its financial activities. Financial statements are important to tax authorities to ensure the accuracy of taxes and additional duties declared and paid by the company.
  2. BALANCE SHEET(HEADS ON EQUITY AND LIABILITIES SIDE)
    ParticularsNote No.Rs.
    I. EQUITY AND LIABILITIES
    1. Shareholder’s funds
    2. Share Application money pending allotment
    3. Non-Current Liabilities
    4. Current Liabilities
    1. Ratio Analysis.
    2. Trend Percentages.
    3. Capital Budgeting.
    4. Fund Flow Statement.
    5. Cash Flow Statement.
  3. It is represented by earmarked investments.
  4. Financial statement analysis enables the ‘Top management’ to analyze the overall business efficiency. It provides better information for planning, budgeting and controlling of the business operations in future.
  5. Common Size Balance Sheet of K Ltd. and L Ltd.
    as at 31.3.2012

    ParticularsNote No.K Ltd.L Ltd.
    Amount (Rs)% of TotalAmount (Rs)% of Total
    I. EQUITY AND LIABILITIES
    Shareholder’s Funds
    Share Capital:3,00,000504,00,00053.3
    Issued and paid up2,00,00033.33,00,00040
    Reserves and Surplus
    Current liabilities
    Short – term Borrowings:1,00,00016.750,0006.7
    6,00,0001007,50,000100
    II. ASSETS
    Non – Current Assets
    Fixed Assets4,00,00066.74,00,00053.3
    Current Assets2,00,00033.33,50,00046.7
    6,00,0001007,50,000100
  6. COMMON-SIZE STATEMENT OF PROFIT AND LOSS
    for the year ended 31st March 2013

    ParticularsAbsolute Amount (Rs.)(%) of Revenue from Operations
    I.Revenue from Operations21,00,000100.00
    Other Income (Interest on Investment)80,0003.91
    Total Revenue21,80,000103.81
    II.Expenses
    (a) Costs of Materials Consumed9,90,00047.14
    (b) Other Expense3,90,00018.57
    Total Expenses13,80,00019.05
    III.Net Profit before tax(I – II)8,00,00038.09
    Less: tax4,00,00019.05
    IV.Net Profit after tax4,00,00019.05

    A common size income statement is an income statement in which each account is expressed as a percentage of the value of sales. It is used for vertical analysis, in which each line item in a financial statement is listed as a percentage of a base figure within the statement, to make comparisons easier.

  7. Comparative Balance Sheet
    as at 31st March 2012 and 2013

    Particulars31st March 2013

    Amount (Rs.)

    31st March 2012

    Amount (Rs.)

    Absolute Change
    (Increase/Decrease)Amount (Rs)
    Percentage Change
    (Increase/Decrease) (%)
    I.EQUITY AND LIABILITIES
    1. Shareholders’ Funds Share Capital
    Share Capital3,44,0004,26,000(82,000)(19.2)
    2. Non-Current Liabilities
    Long-term Borrowings4,38,0006,96,000(2,58,000)(37.1)
    3. Current Liabilities78,0002,98,000(2,20,000)(73.8)
    8,60,00014,20,000(5,60,000)(39.4)
    II.ASSETS
    1. Non-Current Assets
    (a) Fixed Assets4,30,0005,68,000(1,38,000)(24.3)
    (b) Investments4,0006,000(2,000)(33.3)
    2. Current assets4,26,0008,46,000(4,20,000)(49.6)
    8,60,00014,20,000(5,60,000)(39.4)

    A comparative balance sheet presents side-by-side information about an entity’s assets, liabilities, and shareholder’s equity as of multiple points in time. A comparative balance sheet usually has two columns of amounts that appear to the right of the account titles or other descriptions such as Cash and Cash Equivalents, Accounts Receivable, Accounts Payable, etc. A comparative balance sheet analysis is a method of analyzing a company’s balance sheet over time to identify changes and trends.

Class 12 Accountancy Chapter Wise Important Questions

  1. FS of Non profit Organisation
  2. Fundamentals of partnership and Goodwill
  3. Change in Profit sharing ratio of Partners
  4. Admission of a Partner
  5. Retirement or Death of a partner
  6. Dissolution of Partnership
  7. Accounting for share Capital
  8. Accounting for Debentures
  9. Financial Statements and Analysis
  10. Statement Analysis Tools and Accounting Ratios
  11. Cash Flow Statement

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