Q. 5054526. Match List I with List II in context of cashflow statement
List I (A. Sale of fixed asset, B. Purchase of Goodwill, C. Tax Paid, D. Dividend Paid)
List II (I. Outflow in operating activities, II. Inflow in Investing Activities, III. Outflow in Investing Activities, IV. Outflow in Financing Activities)
(A) A-II, B-I, C-IV, D-III
(B) A-II, B-III, C-I, D-IV
(C) A-II, B-I, C-III, D-IV
(D) A-III, B-II, C-IV, D-I
Answer: (B) A-II, B-III, C-I, D-IV
Explanation: Sale of fixed asset is cash coming in from an investment (A-II). Purchase of goodwill is cash going out for an investment (B-III). Tax Paid is a standard operating outflow (C-I). Dividend paid is a cost of raising capital, hence financing outflow (D-IV).
Q. 5054527. Identify the limitations of financial statements :
A. Can be biased
B. Report on stewardship function
C. Aggregate information
D. Only interim reports
E. Basis of fiscal policies
(A) A, C, B only
(B) A, C, D only
(C) E, A, D only
(D) B, A, C only
Answer: (B) A, C, D only
Explanation: Financial statements have inherent limitations: they can be influenced by personal judgments/bias (A), they provide highly aggregated information lacking minute operational details (C), and they are essentially interim reports because the true exact profit/loss is only fully known when the business is completely liquidated (D).
Q. 5054528. What are the different types of liquidity ratios
A. Interest coverage ratio
B. Current ratio
C. Inventory turnover ratio
D. Gross profit ratio
E. Acid test ratio
Choose the correct answer from the options given below:
(A) A & B only
(B) B & E only
(C) B & D only
(D) D & E only
Answer: (B) B & E only
Explanation: Liquidity ratios measure a firm’s ability to meet its short-term debt obligations. The Current Ratio and the Acid Test (Quick) Ratio are the primary liquidity ratios.
Q. 5054529. Identify the components of equity:
A. Money received against share warrants
B. Working capital
C. Share capital
D. Reserves & surplus
E. Cash Revenue from operations
(A) A, C & E only
(B) B, C & D only
(C) A, B & C only
(D) A, C & D only
Answer: (D) A, C & D only
Explanation: Equity (Shareholders’ Funds) in a company’s balance sheet consists of: Share Capital (C), Reserves and Surplus (D), and Money received against share warrants (A).
Q. 5054530. Identify the correct sequence of current assets in company’s Balance sheet?
A. Bills Receivables
B. Cash & cash equivalents
C. Short term loans & advances
D. Inventories
E. Current investments
(A) C, A, B, E, D
(B) D, C, E, A, B
(C) B, D, E, C, A
(D) E, D, A, B, C
Answer: (D) E, D, A, B, C
Explanation: Per Schedule III of the Companies Act, 2013, the standard order of Current Assets is: Current Investments (E), Inventories (D), Trade Receivables (A), Cash and Cash Equivalents (B), Short-term loans and advances (C), and Other Current Assets.