Class 12th Accountancy 2017 Set3 Delhi Board Paper Solution
State any two limitations and any two objectives of ‘Analysis of Financial Statements’.
Limitations of Analysis of Financial Statements:
(i) It ignores price level changes as a change in price level makes analysis of financial statements of different accounting years invalid.
(ii) It suffers from the limitations of financial statements as the analysis is based on the information given in the financial statements.
(iii) It ignores qualitative and non monetary aspect as the quality of management, quality of staff etc. are ignored while carrying out the analysis of financial statements.
(iv) It is not free from bias of accountants such as method of inventory valuation, method of depreciation etc.
Objectives of Analysis of Financial Statements:
(i) To assess the earning capacity and profitability of the organisation.
(ii) To assess the efficiency of managers as well as business by calculating finanical rations and look at the trend at their variations.
(iii) To provide meaningful information about changes in the financial data over time via comparisions of related datas.
Popular Questions of Class 12th accountancy
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What is Capital Fund? How is it calculated?
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What is sacrificing ratio? Why is it calculated?
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If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?
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Why there is need for the revaluation of assets and liabilities on the admission of a partner?
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What is subscription? How is it calculated?
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List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating. - Q:-
Why is Profit and Loss Adjustment Account prepared? Explain.
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If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill?
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Why it is considered desirable to make the partnership agreement in writing.
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On what occasions sacrificing ratio is used?
Recently Viewed Questions of Class 12th accountancy
- Q:-
Give two circumstances under which the fixed capitals of partners may change.
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List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating. - Q:-
Reproduce the format of Realisation Account.
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Why there is need for the revaluation of assets and liabilities on the admission of a partner?
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Why it is necessary to ascertain new profit sharing ratio even for old partners when a new partner is admitted?
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What is sacrificing ratio? Why is it calculated?
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Define Partnership Deed.
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What is Capital Fund? How is it calculated?
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State the meaning of Income and Expenditure Account.
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How deficiency of crditors is paid off at the time of dissolution of firm.