Accountancy

Financial Statement of a Company

Questions Bank

  • Financial Statement are the final product of an accounting process, which begins with the identification of accounting information and recording in the books of accounts.
    2018-02-12 16:06:20
  • Features of Financial Statement are (i) Relates to Specific Period, (ii) Expressed in Monetary Term, (iii) Profitability through statement of Profit and Loss.
    2018-02-12 16:06:03
  • Nature of Financial Statement are (i) Recorded Facts, (ii) Accounting Convention, (iii) Concepts, (iv) Personal Judgements.
    2018-02-12 16:04:59
  • Objective of Financial Statement are (i) Provide financial data to enterprise, (ii) Provide information about earning capacity, (iii) Provide True and Fair View, (iv) Judge the Effectiveness of Management.
    2018-02-12 16:04:44
  • Limitation of Financial Statement are (i) Historical in Nature, (ii) Affected by Personal Judgement, (iii) Different Accounting Practice, (iv) Ignore Qualitative Elements, (v) Ignore Price Level Change.
    2018-02-12 16:04:14
  • Financial Statement is analyzed to know Short Term Solvency and Long Term Solvency"
    2018-02-12 16:03:11
  • Inter Firm Comparison is a comparison of financial statement of two or more firms.
    Intra Firm Comparison is a comparison of financial statement of the same firm but for
    two or more years.
    2018-02-12 16:02:38

  • 2018-02-12 16:02:07

Questions Bank -

Ans. Financial statements states the reports prepared for the purpose of presenting a periodical review of the performance and the financial position of a business enterprise.

Ans. Fixed assets are shown in the company's Balance Sheet at original cost less depreciation.

Ans. The two component of financial statements are
(i)    Statement of Profit and Loss
(ii)    Balance Sheet.

Ans. The financial year in case of company is 1st April to 31st March.

Ans. Section 129 of Companies Act require the financial statements to be prepared in the prescribed form.

Ans. The assets and liabilities are marshalled in a Permanency Order (permanent items are shown first and liquid items are shown in the last) of the financial statement.

Ans. Vertical format of financial statement is a single column presentation of information of the company.

Ans. The Board of Directors are responsible for the preparation of financial statements that are presented before various stakeholders of the company.



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