Read the following statements.
1. Financial statements are only interim reports.
2. Financial statements are prepared on the basis of realisable values.
3. The preparation of financial statements is not an ultimate aim.
4. Certain assumptions are necessary to prepare financial statements.
Which of the following combinations consists of all true statements?
X and Y were sharing profit and loss of the business in the ratio of 3 : 2. They decided to admit Z, who will get 31 of X share of profit form X and 21 of Y share of profit from Y. New profit sharing ratio will be
ABC Ltd was incorporated with an authorized share capital of Rs. 1,00,000 equity shares of Rs. 10 each. The board of directors decided to allot 10,000 shares credited as fully paid to the promoters of the company for their services. Which account should be debited in the books of ABC Ltd?
Reconstruction of a company takes place when
1. the company is undercapitalised.
2. company has incurred heavy losses which must be written off.
3. the company is overcapitalised.
Select the correct answer:
Consider the following statements: Assertion (A): In double account system, the final accounts of a company fails to disclose the true condition of its assets. Reason (R): Because the assets of the company are shown at their cost price even when they are completely worn out.
Now, select your answer:
A company with total assets amounting to Rs. 15,00,000 (including Goodwill Rs. 1,50,000 discount on issue of shares Rs. 2,00,000 and accumulated loss Rs. 2,00,000) and the total liabilities amounting to Rs. 2,20,000 (including a contingent liability of Rs. 40,000) has been taken over by a new company for a purchase consideration of Rs. 11,50,000. the Goodwill a/c in the vendee company's books will appear at:
The question contains two statement. One is Assertion (A) and the other is Reason (R). You have to examine both the statements carefully and decide whether the Assertion (A) and Reason (R) are separately true? and If so, then Reason is the correct explanation of the Assertion. Mark these items in the balance sheet. Assertion (A) Balance sheet does not reveal ownership of business. Reason (R) Assets are just unrefined cost.
Study the following transactions.
1. Raising of short-term loans.
2. Goods purchased for cash.
3. Payment of bonus in the form of shares.
4. Issue of shares in lieu of raw materials.
Select the correct answer:
