Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Financial Statements of a Company NCERT Solutions | What are limitations of financial statem

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

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

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

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

Explain the process of preparing income statement and balance sheet.

Explain how financial statements are useful to the various parties who are interested in the affairs of an undertaking?

List any three objectives of analysing financial statements?

State the meaning of financial statement analysis?

Explain the limitations of financial statements.

Explain the nature of the financial statements.

What do you mean by Ratio Analysis?

List the techniques of Financial Statement Analysis.

What does a Bearer Debenture mean?

What are various types of ratios?

Distinguish between Vertical and Horizontal Analysis of financial data.

State the meaning of ‘Debentures issued as a collateral security’.

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

State the meaning of Analysis and Interpretation.

What is meant by ‘Issue of debentures for consideration other than cash’?

Can the company purchase its own debentures?

What is meant by ‘Redemption out of Capital?

What is meant by redemption of debentures by conversion?

How would you deal with ‘Premium on Redemption of Debentures?

Explain how common size statements are prepared giving an example.

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

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

Distinguish between Vertical and Horizontal Analysis of financial data.

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

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.