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B Com Exam  >  B Com Tests  >  Financial Analysis and Reporting  >  Test: Structure of Financial Statements- 1 - B Com MCQ

Test: Structure of Financial Statements- 1 - B Com MCQ


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10 Questions MCQ Test Financial Analysis and Reporting - Test: Structure of Financial Statements- 1

Test: Structure of Financial Statements- 1 for B Com 2024 is part of Financial Analysis and Reporting preparation. The Test: Structure of Financial Statements- 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Structure of Financial Statements- 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Structure of Financial Statements- 1 below.
Solutions of Test: Structure of Financial Statements- 1 questions in English are available as part of our Financial Analysis and Reporting for B Com & Test: Structure of Financial Statements- 1 solutions in Hindi for Financial Analysis and Reporting course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Structure of Financial Statements- 1 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Financial Analysis and Reporting for B Com Exam | Download free PDF with solutions
Test: Structure of Financial Statements- 1 - Question 1
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What are the primary objectives of preparing financial statements?

Detailed Solution for Test: Structure of Financial Statements- 1 - Question 1
The primary objectives of preparing financial statements are to ascertain the financial results and financial position of a company during a specific period. These statements help in evaluating profitability and solvency, making managerial decisions, and providing information to various stakeholders.
Test: Structure of Financial Statements- 1 - Question 2
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Which financial statement provides information about the profitability of a business for a specific period?

Detailed Solution for Test: Structure of Financial Statements- 1 - Question 2
The Income Statement, also known as the Trading and Profit & Loss Account, provides information about the profitability of a business by presenting revenues, expenses, and resulting net income or net loss for a specific accounting period.
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Test: Structure of Financial Statements- 1 - Question 3
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Deferred revenue expenditure refers to:

Detailed Solution for Test: Structure of Financial Statements- 1 - Question 3
Deferred revenue expenditure refers to expenditures that are incurred during a particular accounting period but have benefits that will extend beyond that period. These expenses are spread over multiple accounting periods even though they are of a revenue nature.
Test: Structure of Financial Statements- 1 - Question 4
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Which of the following is an example of a non-current liability?
Detailed Solution for Test: Structure of Financial Statements- 1 - Question 4
Long-term Borrowings are liabilities that are expected to be repaid over a period of more than twelve months. They fall under non-current liabilities, unlike short-term borrowings, which are expected to be repaid within twelve months.
Test: Structure of Financial Statements- 1 - Question 5
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Which financial statement is prepared to show the financial position of a business on a specific date?
Detailed Solution for Test: Structure of Financial Statements- 1 - Question 5
The Balance Sheet, also known as the Statement of Financial Position, provides a snapshot of a company's financial position on a specific date. It lists assets, liabilities, and equity.
Test: Structure of Financial Statements- 1 - Question 6
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Capital expenditure is incurred for:
Detailed Solution for Test: Structure of Financial Statements- 1 - Question 6
Capital expenditure refers to expenses incurred for acquiring fixed assets or assets that enhance the earning capacity of a business. It is a long-term investment and not related to day-to-day operational expenses.
Test: Structure of Financial Statements- 1 - Question 7
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What is the purpose of preparing a Trading Account?
Detailed Solution for Test: Structure of Financial Statements- 1 - Question 7
The Trading Account is prepared to determine the gross profit or gross loss from core business operations. It calculates the difference between net sales and the cost of goods sold.
Test: Structure of Financial Statements- 1 - Question 8
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Which element appears at the top of a vertical Balance Sheet?
Detailed Solution for Test: Structure of Financial Statements- 1 - Question 8

The Balance Sheet starts with the presentation of Assets, followed by Liabilities and Equity. Assets represent what the company owns.

Test: Structure of Financial Statements- 1 - Question 9
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Which financial statement helps assess the financial soundness of a company in terms of liquidity and business risk?
Detailed Solution for Test: Structure of Financial Statements- 1 - Question 9
The Balance Sheet helps users assess a company's financial soundness by providing information about its liquidity risk, financial risk, credit risk, and overall business risk.
Test: Structure of Financial Statements- 1 - Question 10
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What is the key difference between revenue expenditure and capital expenditure?
Detailed Solution for Test: Structure of Financial Statements- 1 - Question 10
Revenue expenditure is incurred for day-to-day operational expenses and does not increase the earning capacity. Capital expenditure, on the other hand, is related to acquiring fixed assets or assets that enhance earning capacity.
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