Prepare the format of balance sheet and | Class 12 Accountancy - Company Accounts and Analysis of Financial Statements Chapter Financial Statements of a Company, Financial Statements of a Company NCERT Solutions

Question:

Prepare the format of balance sheet and explain the various elements of balance sheet.

Answer:

For a business, the balance sheet is one of the main financial reports prepared by either the bookkeeper or the accountant. Its a snapshot view of your
businesss overall financial situation for a particular period of time. The balancesheet consists of three major elements: assets, liabilities and owners equity. The object of the statement is to prove true the accounting equation, "

Asset = Liabilities + Owners Equity." The statement places a business

assets on the left side of the equation and the liabilities and equity on the right and the amounts on each side of the equation should be equal. Overall Use of the Balance Sheet Your balance sheets show the position of the company on a given day, including its total assets, liabilities and equity, which equals its net worth. Lenders commonly use financial statements to assess your companys creditworthiness. A high debt-to-assets or debt-to-equity ratio is a concern.

1
0
0
Report?

Report a problem on Specifications:

Email id:

Comments

< Previous Question

Next Question >

Popular questions of class 12 Accountancy - Company Accounts and Analysis of Financial Statements

How will you disclose the following items in the Balance Sheet of a company;
(i) Loose tools
(ii) Uncalled liability on partly paid-up shares
(iii) Debentures redemption reserve
(iv) Mastheads and publishing titles (v) 10% debentures
(vi) Proposed dividend
(vii) Share forfeited account
(viii) Capital redemtion reserve
(ix) Mining rights
(x) Work-in-progress

The current ratio provides a better measure of overall liquidity only when a
firm’s inventory cannot easily be converted into cash. If inventory is liquid, the
quick ratio is a preferred measure of overall liquidity. Explain.

Explain the usefulness of trend percentages in interpretation of financial performance of a company.

The liquidity of a business firm is measured by its ability to satisfy itslong-
term obligations as they become due. What are the ratios used forthis purpose?

What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover

What do you understand by analysis and interpretation of financial statements? Discuss its importance.

Describe the different techniques of financial analysis and explain the limitations of financial analysis.

What are liquidity ratios? Discuss the importance of current and liquid ratio.

State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors

What is the importance of comparative statements? Illustrate youranswer with particular reference to comparative income statement.

Recently Viewed Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

What do you mean by Ratio Analysis?

Explain the nature of the financial statements.

Under which head is the ‘Debenture Redemption Reserve’ shown in the balance sheet?

What is meant by redemption of debentures by conversion?

Explain the limitations of financial statements.

Prepare the format of statement of profit and loss and explain its items.

What are important profitability ratios? How are these worked out?

Explain the different types of debentures?

Can the company purchase its own debentures?

What are liquidity ratios? Discuss the importance of current and liquid ratio.

Study Tips for Answering NCERT Questions:

NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

Read the question carefully and focus on the core concept being asked.
Reference examples and data from the chapter when answering questions about Financial Statements of a Company.
Review previous year question papers to get an idea of how such questions may be framed in exams.
Practice answering questions within the time limit to improve your speed and accuracy.
Discuss your answers with your teachers or peers to get feedback and improve your understanding.

Comments

Comment(s) on this Question

Welcome to the NCERT Solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter . This page offers a step-by-step solution to the specific question from Excercise 2 , Question 5: Prepare the format of balance sheet and explain the various elements of balance sheet.....

Prepare the format of balance sheet and | Class 12 Accountancy - Company Accounts and Analysis of Financial Statements Chapter Financial Statements of a Company, Financial Statements of a Company NCERT Solutions

< Previous Question

Next Question >

Popular questions of class 12 Accountancy - Company Accounts and Analysis of Financial Statements

Recently Viewed Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

Study Tips for Answering NCERT Questions:

Comments

Comment(s) on this Question

Chapters for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

Subjects for Class 12

Students Also Read

Important links

Quick Links

Resources

Support