MCQs For NCERT Class 12 Accountancy Chapter 3 Financial Statements of a Company

Please refer to the MCQ Questions for Class 12 Accountancy Chapter 3 Financial Statements of a Company with Answers. The following Financial Statements of a Company Class 12 Accountancy MCQ Questions has been designed based on the latest syllabus and examination pattern for Class 12. Our experts have designed MCQ Questions for Class 12 Accountancy with Answers for all chapters in your NCERT Class 12 Accountancy book.

Financial Statements of a Company Class 12 MCQ Questions with Answers

See below Financial Statements of a Company Class 12 Accountancy MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question. According to the prescribed order of assets in a Company’s Balance Sheet which the asset should be shown first of all?
(a) Non-current Assets
(b) Current Assets
(c) Current Investments
(d) Loans and Advances

Question.B Financial statements disclose :
(a) Monetary information
(b) Qualitative information
(c) Non-monetary information
(d) All the above

Question. The prescribe from the Balance Sheet has given in the Schedule:
(a) VI Part I
(b) VI Part II
(c) III Part I
(d) VII Part IV

Question. Mining Rights are
(a) Tangible Fixed Assets
(b) Intangible Fixed Assets
(c) Intangible Assets Under Development
(d) Capital Work in Progress

Question. Equity is ₹ 90,000; Liabilities ₹ 60,000; Profit of the year ₹20,000. Then total assets will be:
(a) ₹ 1,70,000
(b) ₹ 1,50,000
(c) ₹ 1,10,000
(d) ₹ 80,000

Question. The assets of a business can be classified as :
(a) Fixed and Non-fixed Assets
(b) Tangible and Intangible Assets
(c) Non-Current and Current Asset
(d) None of these

Question. Calls in advance appear in a Company’s Balance Sheet under ………………..
(a) Share Capital
(b) Current Liability
(c) Long-term Borrowings
(d) Reserve & Surplus

Question. ……………… appear in a Company’s Balance Sheet under the Sub-head Short-term Provision
(a) Interest Accrued but not due on Borrowings
(b) Provision for Tax
(c) Unpaid Dividend
(d) Calls in Advance

Question. While preparing the Balance Sheet of a Company ‘Securities Premium’ is shown under:
(a) Current Liability
(b) Share Capital
(c) Long term Borrowings
(d) None of the above

Question. Which of the following is not a subhead of Current Liabilities?
(a) Short Term Provisions
(b) Trade Payables
(c) Deferred Tax Liabilities
(d) Other Current Liabilities

Question. Which of the following will not cover under finance cost?
(a) Discount on issue of debentures written off
(b) Interest paid on bank overdraft
(c) Bank charges
(d) Premium payable on redemption of debentures written off

Question. Interest on Loans given by a financial company is shown in the statement of profit and loss as :
(a) Revenue from Operations
(b) Other Income
(c) Sundry Expenses
(d) None of these

Question. According to which part of Schedule III of the Indian Companies Act, 2013, Indian companies have to prepare Balance Sheet:
(a) Part 1
(b) Part 2
(c) Part 3
(d) Part 4

Question. Preliminary Expenses are shown in the Balance Sheet under which head ?
(a) Fixed Assets
(b) Reserves and Surplus
(c) Loans & Advances
(d) None of these

Question. Interest accrued and due on debentures appear in a company’s Balance Sheet under the Sub-head_____________
(a) Short term Borrowings
(b) Trade Payables
(c) Other current Liabilities
(d) Short term Provisions

Question. Capital Reserve will be shown under
(a) current liabilities
(b) share capital
(c) reserves and surplus
(d) deferred tax liabilities

Question. The Balance Sheet provides information about the financial position of an enterprise:
(a) Over a period of time
(b) During a period of time
(c) For a period of time
(d) At a point of time

Question. Which of the following is not the limitation of Financial Statements?
(a) Ignore qualitative aspects
(b) Personal bias
(c) Ignores price level change
(d) Provide information about the profitability of the business.

Question. Which of the following is not presented under ‘Current Liabilities; in the Balance Sheet of a Company?
(a) Short term Borrowings
(b) Deferred Tax Liabilities
(c) Short-term Provisions
(d) Trade Payables

Question. Balance Sheet shows: 
(a) Financial position of a Company.
(b) Profit or Loss of a Company.
(c) Cash flow of a Company.
(d) None of the above.

Question. ‘Claims against the Company not acknowledged as debts’ is shown under the head ……………….
(a) Current Liabilities
(b) Non-Current Liabilities
(c) Commitments
(d) Contingent Liabilities

Question. The reserve which is created for a particular (specific) purpose and which is a charge against revenue is called:
(a) Capital Reserve
(b) General Reserve
(c) Secret Reserve
(d) Specific Reserve

Question. Which of the following items is shown under the subhead ‘Fixed Tangible Assets while preparing the balance sheet of a company?
(a) Goodwill
(b) Non-current investment
(c) Inventory
(d) Livestock

Question. Which of the following items is shown under the head ‘Non-Current Assets’, while preparing the Balance sheet of a company?
(a) Underwriting Commission
(b) Current Investment
(c) Inventory
(d) Patents

Question. Under which of the following headings/subheadings, calls in Advance will be presented in the Balance Sheet of a company as per Schedule III part I of the Companies Act, 2013?
(a) Current Liabilities
(b) Share Capital
(c) Share Application Money Pending Allotment
(d) Reserves and Surplus

Question. Share Forfeiture Account appears in a Company’s Balance Sheet under the Sub-head ……………….
(a) Share Capital
(b) Reserve & Surplus
(c) Contingent Liability
(d) Commitments

Question. Annual Report is issued by a company to it’s:
(a) Directors.
(b) Auditors.
(c) Shareholders.
(d) Management.

Question. Which of the following is not required to be prepared under the Companies Act:
(a) Statement of Profit & Loss
(b) Balance Sheet
(c) Anditor’s Report
(d) Fund Flow Statement

Question. Balance Sheet is a :
(a) Account
(b) Statement
(c) Both (a) and (b)
(d) All the above

Question. 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. Which of the following is prepared on a particular date?
(a) Trading account
(b) Profit & loss account
(c) Balance sheet
(d) All of the above

Question. 50,000, 9% Debentures redeemable within 12 months of the date of the Balance Sheet will be shown under:
(a) Short term Borrowings
(b) Short term Provision
(c) Other current liability
(d) Trade Payables

Question. Interest accrued on Investments appear in a Company’s Balance Sheet under the Sub-head ………………….
(a) Non-Current Investments
(b) Current Investments
(c) Other Current Assets
(d) Other Non-Current Assets

Question. Statement of Profit & Loss is also called………:
(a) Operating Profit
(b) Balance Sheet
(c) Income Statement
(d) Trading Account

Question. Which of the following items is shown under the head ‘Non-Current Assets’ while preparing the Balance Sheet of a company?
(a) Commission received in advance
(b) Stores and spares
(c) Marketable Securities
(d) Copyrights and Patents

Question. As per Schedule III, Part I of the companies Act, 2013 ‘Unpaid Dividend’ will be presented under which of the following head/sub-head, in the Balance Sheet of a company?
(a) Reserves and Surplus
(b) Current Liabilities
(c) contingent Liabilities
(d) Shareholder’s Funds

Question. The statement which shows the assets and liabilities of a company is known as
(a) Balance sheet
(b) Profit & Loss Account
(c) Trial Balance
(d) None of the options

Question. Horizontal analysis is done by analyzing: 
(a) Financial statements of more than one year
(b) Financial statements of one year
(c) Quarterly financial statements
(d) Half yearly financial statements

Question. Accounting provides data or information on:
(a) Income and cost for the managers
(b) Financial conditions of the institutions
(c) Company’s tax liability for a particular year
(d) All the above

Question. Provision for Tax appears in a company’s Balance Sheet under the Sub-head.
(a) Short term Provisions
(b) Reserves and Surplus
(c) Long term Provisions
(d) Other Current Liabilities

Question. Calls in Arrears appear in a company’s Balance Sheet under__________
(a) Reserve & Surplus
(b) Shareholders Funds
(c) Contingent Liabilities
(d) Short term Borrowings

Question. Which of the following is not an objective of financial statements?
(a) To show company’s financial position.
(b) To shown company’s operating efficiency.
(c) To the effectiveness of management.
(d) To determine income tax liability

Question. Unclaimed dividend is shown under Equity and Liabilities of Balance Sheet of a company under the heading:
(a) Share Capital
(b) Non-Current Liabilities
(c) Current Liabilities
(d) None of these

Question. In the balance sheet of a company, provision for taxation is shown under:
(a) Shareholders Funds – Reserve and Surplus
(b) Non-current Liabilities – Long term Provisions
(c) Current Liabilities – Short term provisions
(d) None of the above

Question. As per the Companies Act, the Balance Sheet of a company is required to be:
(a) Horizontal Form
(b) Vertical Form
(c) Either Horizontal or vertical Form
(d) Neither of the above

Question. Gain on sale of fixed assets by a financial company is shown in the statement of profit and loss as :
(a) Revenue from Operations
(b) Other Income
(c) Both (a) and (b)
(d) None of these

Question. Money received against share Warrants is shown as
(a) Shareholder’s funds
(b) Other Long Term Liabilities
(c) Long term provisions
(d) Other current liabilities

Question.‘Loose Tools’ appear in the company’s Balance Sheet under the head/sub-head:
(a) Inventory
(b) Non-current assets
(c) Other current assets
(d) Stores and Spare Parts

Question. Which of the following is not a part of Finance Cost (in the statement of profit and loss)?
(a) Bank charges
(b) Interest paid on debentures
(c) Interest paid on public deposits
(d) Loss on issue of debentures

Question. Which one of the following statement is not a tool in financial statement analysis?
(a) Ratio analysis
(b) Common size statement
(c) Comparative statements
(d) Marginal costing