Schedule III of Companies Act, 2013 prescribes: MCQ with Answer and Explanation

Schedule III of Companies Act, 2013 prescribes:
A. Format of Balance Sheet and Profit & Loss Account
B. Format of Trial Balance
C. Audit report format
D. Format of Profit & Loss Account
Answer: Option A
Solution (By JKSSB Mock Tests)
Schedule III provides the format for presentation of financial statements (Balance Sheet and Statement of Profit and Loss) for companies.

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Practice More Accountancy and Book Keeping Questions

Question #1
S1: Capital expenditure increases the earning capacity of the business. S2: Revenue expenditure maintains the earning capacity of the business. Which statement(s) is/are correct?
A. S2 only
B. Both S1 and S2
C. Neither S1 nor S2
D. S1 only

Correct Answer: Option B


Explanation:
Capital expenditure is incurred to acquire or improve assets, thereby increasing earning capacity. Revenue expenditure is incurred for day-to-day operations to maintain the existing earning capacity. Both statements are correct.

Question #2
The 'Suspense Account' is opened when:
A. Final accounts are prepared
B. An asset is sold
C. Trial balance does not agree
D. A fraud is detected

Correct Answer: Option C


Explanation:
It holds the difference in trial balance until errors are located.

Question #3
A trader sells goods costing ₹20,000 for ₹25,000. The gross profit margin is:
A. 25%
B. 20%
C. 20% on sales? Actually profit 5,000 on sales 25,000 = 20%.
D. None

Correct Answer: Option B


Explanation:
Gross profit = 5,000. Gross profit ratio on sales = (5,000/25,000)*100 = 20%.