SHREE KRISHNA INTERNATIONAL SCHOOL, VAPI

ACCOUNTANCY
PART - B UNIT 1 QUESTION BANK
FINANCIAL STATEMENTS OF COMPANIES

1. As per Schedule III, Part I of the Companies Act, 2013, Proposed Dividend for the current year will be shown
under:
(a) Reserves and Surplus. (b) Current Liabilities.
(c) Contingent Liabilities. (d) Shareholders' Funds.

2. Which of the following is not shown as 'Current Liabilities' in the Balance Sheet of a company?
(a) Short-term Borrowings. (b) Deferred Tax Liabilities.
(c) Short-term Provisions. (d) Trade Payables.

3. Interest accrued but not due on investment will be shown under which head of Current Assets?
(a) Short-term Loans and Advances. (b) Current Investments.
(c) Other Current Assets. (d) Cash and Cash Equivalents.

4. In a company's Balance Sheet, employees' earned leave payable on retirement is disclosed under
(a) Non-current Liabilities. (b) Current Liabilities.
(c) Non-current Assets. (d) Current Assets.

5. In a company's Balance Sheet, Debit Balance of Statement of Profit and Loss is shown under
(a) Non-current Liabilities. (b) Current Liabilities.
(c) Non-current Assets. (d) Reserves and Surplus.

6. Which of the following is not the limitation of financial statements?

(a) Not free from personal bias. (b) Ignores qualitative elements.
(c) Ignores price level changes. (d) None of these.

7. A company has an Operating Cycle of eight months. It has trade receivables of ₹ 1,00,000 out of which ₹
40,000 has maturity period of 8 months and ₹ 60,000 have a maturity period of 11 months. How it will be
shown in the Balance Sheet?
(a) ₹ 40,000 as Current Assets and ₹ 60,000 as Non-current Assets.
(b) ₹ 60,000 as Current Assets and ₹ 40,000 as Non-current Assets.
(c) ₹ 1,00,000 as Non-current Assets.
(d) ₹ 1,00,000 as Current Assets.

8. Assertion (A): Non-current Liabilities are the liabilities which are not Current Liabilities.
Reason (R): Liabilities are of two types, i.e., Non-current Liabilities and Current Liabilities. Liabilities
which are payable after 12 months or after the period of Operating Cycle from the date of Balance
Sheet are shown as Non-current Liabilities.
In the context of above two statements, which of the following is correct?
(a) Assertion (A) is correct but Reason (R) is wrong.
(b) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion
(A).
(c) Both Assertion (A) and Reason (R) are incorrect.
(d) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

From the following information extracted from the books of Mask Ltd., answer the questions
9 to 13 (Keeping in mind the provisions of Companies Act, 2013):
Particulars ₹
10% Debentures payable after 3 years 5,00,000
11% Bank Loan from PNB repayable after 4 years 2,50,000
Stock-in-Trade (Inventories) 1,00,000
Goodwill 1,25,000
Computer Software under Development 1,25,000
Provision for Tax 1,00,000

9. Provision for tax of the company will be shown under the sub-head of the Current Liabilities of the
Balance Sheet as ……….
(a) Trade Payable. (b) Short-term Borrowings.
(c) Other Current Liabilities. (d) Short-term Provisions.

10. 10% Debentures will be shown under................. head of the Equity and Liabilities part of the Balance
Sheet
(a) Shareholder’s funds (b) Non – current liabilities
(c) Current Liabilities (d) None of these.

11. Computer software under development will be shown under................. head of the sub-head property,
plant and equipment and intangible assets on the assets part of the Balance Sheet.
(a) Intangible Assets under Development (b) Tangible Assets
(c) Capital Work-in-Progress (d) Capital Advance

12. Total value of intangible assets that will be shown under the sub-head intangible assets on the assets part
of the Balance Sheet is
(a) ₹ 1,25,000. (b) ₹ 2,50,000. (c) ₹ 3,75,000. (d) ₹ 5,50,000.

13. Total Long-term Borrowings that will be shown under the head Non-current Liabilities on the Equity and
Liabilities part of the Balance Sheet is ……….
(a) ₹ 1,25,000 (b) ₹ 2,50,000. (c) ₹ 7,50,000. (d) ₹ 5,00,000.

14. Classify the following items under Major-heads and Sub-heads (if any) in the Balance Sheet of a
company as per Schedule III of the Companies Act, 2013:
(i) Marketable Securities. (ii) Stores and Spares.
(iii) Interest Accrued and due on Debentures.
(iv) Debentures payable within the period of 12 months or Operating Cycle period from the date of
Balance Sheet.
(v) Bank Overdraft. (vi) Debentures Redemption Reserve.

15. Match the following:

Column 1
A. Proposed Dividend.
B. Unclaimed Dividend.
C. Capital Reserve.
D. Balance Sheet.
Column 2
(i) Other Current Liabilities.
(ii) Reserves and Surplus.
(iii) Part I of Schedule III of Companies Act,
2013.
(iv) Contingent Liabilities.

(a) A – (iii), B – (ii), C – (i), D – (iv) (b) A – (ii), B – (iii), C – (iv), D – (i)

(c) A – (iv), B – (ii), C – (iii), D – (i) (d) A – (iv), B – (i), C – (ii), D – (iii)

16. Under which heads and sub-heads will the following items be shown in the Balance Sheet of a
Company as per Schedule III, Part I of the Companies Act, 2013?
(i) Securities Premium (ii) Interest accrued and due on secured loans
(iii) Cash and Bank balance (iv) Interest accrued but not due
(v) Building (vi) Mining Rights
(vii) Sundry Debtors (viii) Sundry Creditors
(ix) Premium on Redemption of Debentures. (x) Provision for Tax

17. Under which heads and sub-heads will the following items be shown in the Balance Sheet of a
Company as per Schedule III, Part I of the Companies Act, 2013?
(i) Prepaid Expenses (ii) Loose Tools
(iii) Loans Repayable on Demand (iv) Provision for Employees Benefit
(v) Negative Balance in the Statement (vi) Bank Overdraft
of Profit & Loss (vii) Bills Receivables
(viii) Trade Marks

18. Under which heads and sub-heads will the following items be shown in the Balance Sheet of a
Company as per Schedule III, Part I of the Companies Act, 2013?

(i) Public Deposits;

(iii) Prepaid Rent;
(v) Computer Software;
(ii) Office Furniture;
(iv) Outstanding Salaries;
(vi) Interest Accrued on Investment

Source:
SCS (SULTAN CHAND) reference book; PART B