Practicing Success

Register
Start Free Mocks
CUETMOCK

Ace Your

CUET Preparation Today

Start Free Mocks
Home Questions SSK5GNWV7S
Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: Two broad heads under which a Balance Sheet is prepared are (Equity & Liabilities) and (Assets).
Reasoning: Part I of Schedule III of the Companies Act 2013 prescribes to show Equity and Liabilities in first part followed by assets in second part.

Options:

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

Assertion (A) is true but Reasoning (R) is not correct.

Assertion (A) is not true but Reasoning (R) is correct.

Correct Answer:

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Explanation:

In the Vertical Form of Balance Sheet, there are two heads. Part I of Scehdule II show Equity and Liabilities in first part followed by assets in second part.

BALANCE SHEET FORMAT

Particulars

Note no

Figures at the end of current year

Figures at the end of previous year

 EQUITY AND LIABILITIES

1)   Shareholder’s Funds

(a)   Share Capital

(b)  Reserve sand Surplus

(c)  Money received against share warrants

2)     Share Application money pending allotment

3)      Non-current  Liabilities

(a)   Long term borrowings

(b)    Deferred tax liabilities(net)

(c)    Other long term liabilities

(d)   Long term provisions

4)      Current Liabilities

(a)   Short-term borrowings

(b)   Trade payables

(c)    Other current liabilities

(d)   Short-term provisions

Total

  1. ASSETS

1)      Non-Current Assets

(a)      Fixed assets

(i)     Tangible assets

(ii)     Intangible assets

(iii)      Capital work-in-progress

(iv)     Intangible assets under development

(b)      Non-current investments

(c)      Deferred tax assets(net)

(d)      Long-term loans and advances

(e)      Other non-current assets

2)      Current Assets

(a)      Current investments

(b)      Inventories

(c)      Trade receivables

(d)      Cash and cash equivalents

(e)      Short term loans and advances

(f)       Other current assets

Total

 

 

 

 

 

 

 

 

 

 

 

  
 

CUET Questions