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

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:

    Particulars	Note No.	K Ltd.		L Ltd.
    		Figures as at the end of  the current reporting period	Figures as at the end of  the previous reporting period	Figures as at the end  of the current reporting period	Figures as at the end of  the previous reporting period
    I. EQUITY AND LIABILITIES
    Shareholder’s Funds
    Share Capital:		3,00,000		4,00,000
    Issued and paid up		2,00,000		3,00,000
    Reserves and Surplus
    Current liabilities
    Short – term Borrowings:		1,00,000		50,000
    		6,00,000		7,50,000
    II. ASSETS
    Non – Current Assets
    Fixed Assets		4,00,000		4,00,000
    Current Assets		2,00,000		3,50,000
    		6,00,000		7,50,000

12. Prepare Common-size Statement of Profit and Loss from the following for the year ended 31st March 2013.

    Particulars	(Rs.)
    Revenue from Operations	21,00,000
    Cost of Materials Consumed	9,90,000
    Other Expenses	3,90,000
    Interest on investment	80,000
    Tax Payable	50%

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

    	Particulars	31st March 2013 Amount (Rs)	31st March 2012 Amount (Rs)
    I.	EQUITY AND LIABILITIES
    	1. Shareholders’ Funds Share Capital
    	Share Capital	3,44,000	4,26,000
    	2. Non-Current Liabilities
    	Long-term Borrowings	4,38,000	6,96,000
    	3. Current Liabilities	78,000	2,98,000
    		8,60,000	14,20,000
    II.	ASSETS
    	1. Non-Current Assets
    	(a) Fixed Assets	4,30,000	5,68,000
    	(b) Investments	4,000	6,000
    	2. Current assets	4,26,000	8,46,000
    		8,60,000	14,20,000

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

Ch-9 Financial Statements and Analysis

Answer

1. 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.
   2. 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.
   4. 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.
2. 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.
3. BALANCE SHEET(HEADS ON EQUITY AND LIABILITIES SIDE)
   

   Particulars	Note 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.
4. It is represented by earmarked investments.
5. 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.
6. Common Size Balance Sheet of K Ltd. and L Ltd.
   as at 31.3.2012

   Particulars	Note No.	K Ltd.		L Ltd.
   		Amount (Rs)	% of Total	Amount (Rs)	% of Total
   I. EQUITY AND LIABILITIES
   Shareholder’s Funds
   Share Capital:		3,00,000	50	4,00,000	53.3
   Issued and paid up		2,00,000	33.3	3,00,000	40
   Reserves and Surplus
   Current liabilities
   Short – term Borrowings:		1,00,000	16.7	50,000	6.7
   		6,00,000	100	7,50,000	100
   II. ASSETS
   Non – Current Assets
   Fixed Assets		4,00,000	66.7	4,00,000	53.3
   Current Assets		2,00,000	33.3	3,50,000	46.7
   		6,00,000	100	7,50,000	100

7. COMMON-SIZE STATEMENT OF PROFIT AND LOSS
   for the year ended 31st March 2013

   	Particulars	Absolute Amount (Rs.)	(%) of Revenue from Operations
   I.	Revenue from Operations	21,00,000	100.00
   	Other Income (Interest on Investment)	80,000	3.91
   	Total Revenue	21,80,000	103.81
   II.	Expenses
   	(a) Costs of Materials Consumed	9,90,000	47.14
   	(b) Other Expense	3,90,000	18.57
   	Total Expenses	13,80,000	19.05
   III.	Net Profit before tax(I – II)	8,00,000	38.09
   	Less: tax	4,00,000	19.05
   IV.	Net Profit after tax	4,00,000	19.05

   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.

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

   	Particulars	31st 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 Capital	3,44,000	4,26,000	(82,000)	(19.2)
   	2. Non-Current Liabilities
   	Long-term Borrowings	4,38,000	6,96,000	(2,58,000)	(37.1)
   	3. Current Liabilities	78,000	2,98,000	(2,20,000)	(73.8)
   		8,60,000	14,20,000	(5,60,000)	(39.4)
   II.	ASSETS
   	1. Non-Current Assets
   	(a) Fixed Assets	4,30,000	5,68,000	(1,38,000)	(24.3)
   	(b) Investments	4,000	6,000	(2,000)	(33.3)
   	2. Current assets	4,26,000	8,46,000	(4,20,000)	(49.6)
   		8,60,000	14,20,000	(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.

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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