MCQ Questions Chapter 3 Financial Statements of a Company Class 12 Accountancy

Please refer to MCQ Questions Chapter 3 Financial Statements of a Company Class 12 Accountancy with answers provided below. These multiple-choice questions have been developed based on the latest NCERT book for class 12 Accountancy issued for the current academic year. We have provided MCQ Questions for Class 12 Accountancy for all chapters on our website. Students should learn the objective based questions for Chapter 3 Financial Statements of a Company in Class 12 Accountancy provided below to get more marks in exams.

Chapter 3 Financial Statements of a Company MCQ Questions

Please refer to the following Chapter 3 Financial Statements of a Company MCQ Questions Class 12 Accountancy with solutions for all important topics in the chapter.

MCQ Questions Answers for Chapter 3 Financial Statements of a Company Class 12 Accountancy

Question: Bank overdraft is shown in the balance sheet under the
(a) Short Term Borrowings
(b) Non-current liabilities
(c) Non Current assets
(d) None of the options

Question: An example of fixed asset is
(a) Live stock
(b) Value stock
(c) Income stock
(d) None of the options

Question: ___________ is conducted by bankers and government
(a) External Analysis
(b) Internal Analysis
(c) External Analysis and Internal Analysis
(d) None of the options

Question: The following is(are) the external source(s) of cash
(a) All of the options
(b) Long terms loans
(c) Issue of new shares
(d) Short term borrowings

Question: The total cost that arises when the quantity produced is increased by one unit is called
(a) Marginal cost
(b) Average cost
(c) Fixed cost
(d) None of the options

Question: The following is(are) the type(s) of capital budgeting decision(s)
(a) All of the options
(b) Diversification
(c) Replacements
(d) Expansion

Question: Current assets are also referred to as
(a) Working capital
(b) Investments
(c) Inventory
(d) None of the options

Question: The assets held by a business which can be converted in the form of cash, without disturbing the normal operations of a business
(a) Current assets
(b) Tangible assets
(c) Intangible assets
(d) Fixed assets

Question: The return which the company pays on borrowed funds is termed as
(a) All of the options
(b) Interest
(c) Dividend
(d) Bonus

Question: Objectives of analysis and interpretation of financial statements are
(a) All of the options
(b) Progress
(c) Position
(d) Prospects

Question: Carriage Inward is normally debited to ____
(a) Manufacturing Account
(b) Profit and Loss account
(c) Capital Account
(d) None of the options

Question: Main headingsof assets are
(a) Current Assets and Non Current assets
(b) Current Assets
(c) Non Current assets
(d) None of the options

Question: Reliability of financial analysis depends upon the
(a) Reliability of financial data
(b) Reliability of Customer
(c) Reliability of financial data and Reliability of Customer
(d) None of the options

Question: Main headings of the liability side of a company balance sheet
(a) All of the options
(b) Shareholders Fund
(c) Current Liabilities
(d) Non Current Liabilities

Question: Sub- headings are Non Current Liabilities are
(a) All of the options
(b) Long Term borrowing
(c) Deferred Tax Liabilities
(d) Long Term Provisions

Question: Goodwill is shown under which subheading
(a) Intangible Assets
(b) Current Assets
(c) Current Liability
(d) None of the options

Question: Financial Statement provide a summary of
(a) All of the options
(b) Assets
(c) Liabilities
(d) Capital

Question: Non Current Assets is
(a) Patents and Trade Marks
(b) Bills Receivables
(c) Prepaid Expenses
(d) Debtors

Question: Calls in advance is to be shown under the heading of
(a) Current Liabilities
(b) Current Assets
(c) Current Liabilities and Current Assets
(d) None of the options

Question: Security Premium is show under which major head
(a) Shareholders fund
(b) Current Liabilities
(c) Current Assets
(d) None of the options

Question: Prepaid Expenses is
(a) Current Assets
(b) Current Liabilities
(c) Long term loan
(d) None of the options

Question: Provision for Provident Fund comes under
(a) Long-term Provision
(b) Trade Payable
(c) Other Current Liabilities
(d) None of the options

Question: Sinking Fund is shown under which subheading
(a) Trade Payable
(b) Non Current Liabilities
(c) None of the options
(d) Reserve and Surplus

Question: Authorised Capital is shown under which major heading in balance sheet
(a) Current Liability
(b) Shareholders Fund
(c) Current Assets
(d) None of the options

Question: Debenture is shown under which major heading in balance sheet
(a) Other Current Liabilities
(c) Current Liability
(d) None of the options
(d) Non Current Liabilities

Question: Example of Short-term Provision is
(a) Debentures
(b) Loan
(c) Provision for Tax
(d) None of the options

Question: Provision for Tax is our
(a) Assets
(b) Liability and Assets
(c) Liability
(d) None of the options

Question: Bills Payable shown under major heading Current Liability and Subheading
(a) Trade Payable
(b) Short-term Provision
(c) Other Current Liabilities
(d) None of the options

Question: Unclaimed Dividend shown under major heading Current Liability and Subheading
(a) Other Current Liabilities
(b) Trade Payable
(c) Short-term Provision
(d) None of the options

Question: Unclaimed Dividend is shown under which major heading in balance sheet
(a) Equity and Liability
(b) Current Assets
(c) None of the options
(d) Current Liability

Question: Proposed Dividend shown under major heading Current Liability and Subheading
(a) Trade Payable
(b) Other Current Liabilities
(c) Short-term Provision
(d) None of the options

Question: Proposed Dividend is shown under which major heading in balance sheet
(a) Current Liability
(b) Current Assets
(c) Equity and Liability
(d) None of the options

Question: Miscellaneous Expenditure are
(a) Preliminary Expenses
(b) All of the options
(c) Discount allowed on the issue of shares/deb
(d) Development expenditure not adjusted

Question: Fixed Assets subheading is divided into
(a) All of the options
(b) Tangible
(c) Intangible Assets
(d) Capital work in progress

Question: In Balance Sheet Bills Payable is shown under the
(a) Current Assets
(b) Equity and Liability
(c) None of the options
(d) Current Liabilities

Question: Long term Liabilities is
(a) All of the options
(b) Bonds
(c) Debenture
(d) Loans from Banks

Question: Non Current Liabilities classified in balance sheet
(a) Long term borrowings
(b) Deferred tax liabilities
(c) All of the options
(d) Other long term liabilities

Question: Financial Statement also called
(a) Final Accounts
(b) Profit & Loss A/c
(c) Trading A/c
(d) None of the options

Question: Those expenses which paid in advance by the firm
(a) Prepaid expenses
(b) Accrued income
(c) Prepaid expenses and Accrued income
(d) None of the options 

Question: Prepaid expenses are shown under
(a) Inventories
(b) Other current assets
(c) Cash Equivalents
(d) None of the options

Question: Provision for Tax appears in a Company’s Balance Sheet under the Sub-head …………….
(a) Short-term Provisions
(b) Reserves and Surplus
(c) Long-term Provisions
(d) Other Current Liabilities

Question: Bills Receivables appear in a Company Balance Sheet under the Sub-head
(a) Current Investments
(b) Cash Equivalents
(c) Trade Receivables
(d) Short term Loans and Advances

Question: Marketable securities appear in a Company Balance Sheet under the Sub-head
(a) Current Investments
(b) Non-Current Investments
(c) Intangible Assets
(d) Short-term Loans and Advances

Question: While preparing the Balance Sheet of a company ‘Underwriting Commission’ is shown under which head?
(a) Unamortized Expenditure
(b) Current Assets
(c) Non-Current Assets
(d) Current Liability

Question: Which of the following items is shown under the head ‘Current Liabilities’ while preparing the Balance Sheet of a company?
(a) Securities Premium Reserve
(b) Debentures
(c) Livestock
(d) None of the above

Question: While preparing the Balance Sheet of a company ‘Securities Premium’ is shown under :
(a) Current Liability
(b) Share Capital
(c) Long-term Borrowings
(d) None of the above

Question: Balance sheet of a company is required to be prepared in the format given in
(a) Schedule III Part II
(b) Schedule III Part I
(c) Schedule III Part III
(d) Table A

Question: As per Companies Act, the Balance Sheet of a company is required to be presented in …………….
(a) Horizontal Form
(b) Vertical Form
(c) Either Horizontal or Vertical Form
(d) Neither of the above

Question: 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

Question: In a Company’s Balance Sheet, Debit (Negative) balance of Statement of Profit and Loss is shown under
(a) Non-current Liabilities.
(b) Current Liabilities.
(c) Non-current Assets.
(d) Reserves and Surplus.

Question: Patents and Trademarks are examples of
(a) intangible Fixed Assets.
(b) Tangible Fixed Assets.
(c) Intangible Assets under Development.
(d) Capital Work-in-Progress.

Question: Identify the item which is not a part of Shareholders’ Funds:
(a) Share Application Money Pending Allotment
(b) Share Capital
(c) Reserves and Surplus
(d) Money Received against Share Warrants.

Question: Fixed Deposits appear in a Company’s Balance Sheet under :
(a) Current Assets
(b) Current Liabilities
(c) Long-term Provisions
(d) Long-term Borrowings

Question: Goodwill appears in a Company’s Balance Sheet under the Sub-head
(a) Unamortized Assets
(b) Non-Current Investment
(c) Intangible Assets
(d) Tangible Assets

Question: Share Forfeiture Account appears in a Company’s Balance Sheet under the Sub-head …………….
(a) Share Capital
(b) Reserve & Surplus
(c) Contingent Liability
(d) Commitments

Question: Expenses allowed on issue of shares appears in a Company’s Balance Sheet under:
(a) Share Capital
(b) Current Liability
(c) Unamortized Expenditure
(d) Contingent Liability

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