Test: Financial Statements of a Company- Assertion & Reason Type Questions - Commerce MCQ

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): All contingent liabilities are shown in the non-current liabilities section of the balance sheet.

Reason (R): A contingent liability refers to the claim which is uncertain to arise/which may or may not rise/which is dependent on a happening in future.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The balance sheet of the company needs to show the complete detail of the share capital of the company.

Reason (R): As per Schedule III of Companies Act, 2013, the Balance Sheet must disclose authorized capital, issued capital and subscribed capital for each class of share capital (i.e. for both Equity and Preference Shares) besides the called-up amount made by the company and paid-up amount made by the shareholders.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Financial statements are the end products of the accounting process which reveal the financial results of a specified period and financial position as on a particular date.

Reason (R): The basic objective of these statements is to provide information required for decision making by the management as well as other outsiders who are interested in the affairs of the undertaking, as per Section 129 Schedule III to the Companies Act, 2013 every year.