Financial Statements

Nature/Structure

Medium

Which one of the following is not true?

Financial statements are prepared on the basis of accounting principles and conventions.

Any changes in accounting principles or methods will affect the utility of the financial statements.

During the period of high inflation, the amounts associated with the items of balance sheet are adjusted to current price level.

Financial statements record only those transactions which can be expressed in monetary units only.

✅ Correct Option: 3

Under the historical cost convention, balance sheet items are recorded at original cost and are not adjusted for inflation or changes in price level. Hence option (c) is not true. The other three statements correctly describe the nature and limitations of financial statements.

2023: 29 May Shift 2

Select the sub-head under which loose tools will be shown in the Balance Sheet of a company -

2023: 11 June Shift 3

Non-Cash transactions will be excluded from :

2025: 15 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Accounting standard rules	(I) 2013
(B) Companies Act	(II) 1932
(C) Financial statement of company	(III) 2006
(D) Partnership Act	(IV) Schedule III

Choose the correct answer from the options given below:

2025: 15 May Shift 2

Match List-I with List-II

Match the statements with their respective Provisions/ other name

List-I	List-II
(A) AS-3	(I) Statement of profit & loss
(B) Schedule 3 of Companies Act	(II) Cash flow statement
(C) Financial status of the undertaking	(III) Final accounts of company
(D) Performance report	(IV) Balance sheet

Choose the correct answer from the options given below:

2023: 28 May Shift 1

Current liabilities include :

(A) Trade receivables

(B) Unclaimed dividend

(D) Acceptances

(E) 12% debentures redeemable after four years

Choose the correct answer from the options given below :

2023: 11 June Shift 3

Subscription Received in Advance is a :

Which one of the following is not true?

Solution

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