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MCQs for CBSE Class 12 Accountancy: This article brings to you some important MCQs for Class 12 Accountancy Chapter 7, Financial statements of Company. Also, find links to some important resources that can assist you in preparation of upcoming CBSE Board Examinations(2023-24).
MCQs for CBSE Class 12 Accountancy Chapter 7: Find attached a PDF download link for important MCQ-type questions of CBSE Class 12 Accountancy Chapter 7, Financial Statements of a Company. Also, find links to some important resources for preparation of upcoming CBSE Board Examinations.
All these questions and answers have been prepared for you by our subject experts, as per Revised CBSE Syllabus and guidelines. MCQs would play a key role in Board Exam’s question paper, as laid out by CBSE Sample Paper 2024. Thus, it is important to develop a habit of solving MCQs correctly while managing time. To do that, first NCERT chapters have to be studied precisely. Then, knowledge gained from those theoretical concepts must be practically applied, while solving MCQs. You have to read questions carefully and observe the available options with utmost caution, to be able to solve MCQs correctly.
Related:
CBSE Class 12 Accountancy Syllabus 2023-24 (PDF)
CBSE Class 12 Accountancy Sample Paper 2023-24 (PDF)
Important MCQs for CBSE Class 12 Accountancy Chapter 7, are mentioned below as:
1.Financial Analysis becomes useless because it
(a) Measures the profitability
(b) Measures the solvency
(c) Lacks qualitative analysis
(d) Makes a comparative study
Answer. c) Lacks qualitative analysis
2.Main objective of analysis of financial statements is:
(a) To know the financial strength
(b) To make a comparative study with other firms
(c) To know the efficiency of management
(d) All of the Above
Answer. d)All of the Above
3.Contingent Liabilities are exhibited under the heading:
(a) Fixed Liabilities
(b) Current Liabilities
(c) As a footnote
(d) None of these
Answer. c) As a footnote
4.Which of the following items is shown under the head ‘Non-Current Assets ‘while preparing company’s Balance Sheet as per Schedule III of Company Act 2013?
(a) Motor Vehicles, Stock in trade, Goodwill, Cash at bank, Loose tools
(b) Bills receivable, Goodwill, Motor Vehicles, Loose tools
(c) Goodwill, Motor Vehicles, Loose tools
(d) Goodwill, Motor Vehicles
Answer. d) Goodwill, Motor Vehicles
5.Calls in advance appear in a Company’s Balance Sheet under
(a) Share Capital
(b) Current Liability
(c) Long-term Borrowings
(d) Reserve & Surplus
Answer. b) Current Liability
6.Which of the following is not a limitation of analysis of financial statements?
(a) Window Dressing
(b) Price level changes ignored
(c) Subjectivity
(d) Intra-firm comparison possible
Answer. d)Intra-firm comparison possible
7)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
Answer. d) Specific Reserve
8.Which analysis is considered as dynamic?
(a) Horizontal Analysis
(b) Vertical Analysis
(c) Internal Analysis
(d) External Analysis
Answer. a) Horizontal Analysis
9.Bank overdraft and cash credit are treated as ‘short-term borrowings’ in the balance sheet of a company.
(a) True
(b) False
(c) Partially true
(d) Can’t say
Answer. a)True
10.Analysis of Financial Statement is significant
(a) For creditors
(b) For Managers
(c) For employees
(d) All the above
Answer. d) All the above
11.Livestock is an item of……… under sub-head fixed asset and the major head non-current assets.
(a) tangible assets.
(b) inventories
(c) trade receivables
Answer. a) tangible assets
12.Balance sheet of a company is required to be prepared as per the format given in
(a) Schedule III Part II
(b) Schedule III Part I
(c) Schedule III Part III
(d) Schedule II Part I.
Answer. b) Schedule III Part I
13.Equity ₹ 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
Answer. a) ₹ 1,70,000
14.Which of the following is not required to be prepared under the Companies Act
(a)Statement of Profit and Loss
(b) Balance Sheet
(c) Report of Director’s and Auditor’s
(d) Funds Flow Statement
Answer. c) Report of Director’s and Auditor’s
15.There are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the appropriate option from the options given below:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion(A)
(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A)is false, but Reason (R) is true
(d) Assertion (A ) is true, but Reason (R) is false
Assertion (A) Analysis of financial statements is done to assess the managerial efficiency. Reason (R) Financial statement analysis helps to identify the areas where the managers have been efficient and the areas where they have been inefficient.
Answer. a) Both Assertion and Reason are true and Reason is the correct explanation of Assertion
To download the MCQs for Class 12 Accountancy Chapter 7, click on the link below.
Important resources for CBSE Board Examination(2023-2024)
CBSE Class 12 Syllabus 2023-24 (All Subjects)
CBSE Class 12 Sample Papers 2023-24 (All Subjects)
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