Under the Indian Companies Act, 2013, financial statements include: MCQ with Answer and Explanation

Under the Indian Companies Act, 2013, financial statements include:
A. Only balance sheet and profit & loss account
B. Only balance sheet
C. Balance sheet, profit & loss account, cash flow statement, statement of changes in equity and notes
D. Only profit & loss account
Answer: Option C
Solution (By JKSSB Mock Tests)
As per Companies Act 2013, financial statements comprise balance sheet, profit and loss account, cash flow statement, statement of changes in equity and any explanatory notes.

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Practice More Accountancy and Book Keeping Questions

Question #1
When goods costing Rs 10,000 are sold for Rs 15,000 in cash, the journal entry includes a credit to Sales Account by:
A. Rs 10,000
B. Rs 15,000
C. Rs 25,000
D. Rs 5,000

Correct Answer: Option B


Explanation:
Sales account is always credited with the selling price (invoice value), which is Rs 15,000.

Question #2
Which of the following is a fundamental accounting assumption as per AS-1?
A. Materiality
B. Conservatism
C. Accrual
D. Matching

Correct Answer: Option C


Explanation:
AS-1 lists Going Concern, Consistency, and Accrual as the three fundamental accounting assumptions.

Question #3
A business paid ₹12,000 as insurance premium for the year ending 31st March 2025, out of which ₹3,000 relates to next year. Insurance expense for current year is:
A. ₹9,000
B. ₹3,000
C. ₹12,000
D. ₹15,000

Correct Answer: Option A


Explanation:
Prepaid ₹3,000, so current year expense = 12,000 - 3,000 = ₹9,000.