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Class 12th Accountancy 2017 Set1 Delhi Board Paper Solution

Question 22

Financial statements are prepared following the consistent accounting concepts, principles, procedures and also the legal environment in which the business organizations operate. These statements are the sources of information on the basis of which conclusions are drawn about the profitability and financial position of a company so that their users can easily understand and use them in their economic decisions in a meaningful way.

From the above statement identify any two values that a company should observe while preparing its financial statements. Also state under which major headings and sub-headings the following items will be presented in the balance sheet of a company as per Schedule III of the Companies Act 2013.

General Reserves, short term loans and advances, Capital work in progress and design.

Answer

Values that a company should observe while preparing its financial statements are:

1) Financial statements should be prepared by following the accounting concepts, principles and procedures.



2) Providing authenticated information to users.

3)  Financial statements should be prepared by following code of conduct and ethical and legal framework.

 

Major headings and sub-headings the following items will be presented in the balance sheet of a company as per Schedule III of the Companies Act 2013:

Item Main Heading Sub Heading
General Reserves Shareholder's Fund Reserve and Surplus
Short term loans and advances Current Assets  
Capital work in progress Non Current Assets Fixed Assets
Design Non Current Assets Fixed Assets/ Intangible Assets