Showing the 12 most recent of 63 on this concept.

1. CBSE 2026Set MARCH1 mark
   Q.Loans which are repayable within __________ months, are called as short-term borrowings.

   ›Reveal solutionSolution

   Loans repayable within 12 months are called short-term borrowings.

   As per Schedule III of the Companies Act, 2013, a liability is classified as current if it is expected to be settled within twelve months from the reporting date. Borrowings meeting this condition are shown under Current Liabilities as short-term borrowings; borrowings repayable after twelve months are long-term (non-current) borrowings.

   ✓Final answer

   Loans which are repayable within 12 (twelve) months are called short-term borrowings.

   Those repayable after 12 months form part of long-term borrowings.

2. CBSE 2026Set ANNUAL1 markMCQ
   Q.According to Indian Companies Act, 2013, the term "Sundry-creditor" has been replaced by which term? A) Trade receivables B) Trade payables C) Trade debtors D) Bills payables

   ›Reveal solutionSolution

   'Sundry Creditors' is now shown as 'Trade Payables' under the Companies Act, 2013 - option (B).

   The revised Schedule III format modernised the balance-sheet terminology that RBSE / CBSE Class-12 Accountancy follows:

   • Sundry Creditors -> Trade Payables (option B).
   • Sundry Debtors / Bills Receivable -> Trade Receivables (option A describes the debtors side, not creditors).

   So the term replacing 'Sundry Creditors' is Trade Payables.

   ✓Final answer

   Trade payables — option (B).

3. CBSE 2026Set ANNUAL1 mark
   Q.Fill in the blank: Those Assets, which are realised within __________ months are called current assets. (12/24)

   ›Reveal solutionSolution

   Assets realised within 12 months are classified as current assets.

   As per Schedule III of the Companies Act, 2013, an asset is treated as current if it is expected to be realised within twelve months after the reporting date (or within the firm's normal operating cycle, or is held primarily for trading, or is cash/cash equivalent). Assets not meeting these tests are non-current. Hence the blank is 12 months.

   ✓Final answer

   Assets realised within 12 months are called current assets.

4. CBSE 2026Set ANNUAL1 markMCQ
   Q.Current liabilities include

   (a) Sundry creditors

   (b) Outstanding expenses

   (c) Bills payable

   (d) All of these

   ›Reveal solutionSolution

   All the listed items are current liabilities - option (d).

   Current liabilities are obligations payable within a short period (normally one year). Sundry creditors (trade payables), outstanding expenses (expenses incurred but not yet paid) and bills payable (short-term promissory obligations) are all payable in the short term and hence are all current liabilities.

   ✓Final answer

   (d) All of these.

5. CBSE 2026Set ANNUAL1 markMCQ
   Q.The Balance Sheet of a company is prepared according to which schedule of the Indian Companies Act 2013?

   (a) Schedule I

   (b) Schedule II

   (c) Schedule III

   (d) Schedule V

   ›Reveal solutionSolution

   Correct option: (c) Schedule III.

   Section 129 of the Companies Act, 2013 requires every company to prepare its Balance Sheet in the vertical form prescribed in Schedule III of the Act. So the balance sheet is prepared according to Schedule III.

   ✓Final answer

   (c) Schedule III.

6. CBSE 2026Set ANNUAL1 markMCQ
   Q.Office Building under construction which may take 3 to 4 years for completion will be shown under _______ in the Balance Sheet of the Company.

   (a) Intangible assets under development

   (b) Capital work in Progress

   (c) Non-Current Assets

   (d) Work in Progress

   (a) Intangible assets under development

   (b) Capital work in Progress

   (c) Non-Current Assets

   (d) Work in Progress

   ›Reveal solutionSolution

   Office Building under construction is shown under Capital Work in Progress (Option B).

   'Capital Work in Progress' (CWIP) represents the cost incurred so far on fixed assets that are being constructed or installed but are not yet ready for their intended use. Since the office building here will take 3 to 4 more years to complete, it is not yet a usable (operational) fixed asset; it cannot be depreciated or classified as a completed Building. It is disclosed as a separate line under Non-current Assets → Fixed Assets → Capital Work in Progress, distinct from 'Tangible Assets' (completed buildings) and 'Intangible Assets under development' (which is for intangible items like software, patents being developed, not physical construction).

   ✓Final answer

   (B) Capital work in Progress.

7. CBSE 2026Set ANNUAL1 markMCQ
   Q.Under which Sub-head will "Patents and Trademark" appear in the Balance Sheet of a Company as per Schedule III of Company's Act, 2013 ?

   (a) Intangible Assets

   (b) Tangible Assets

   (c) Other Current Assets

   (d) Other Non-current Assets

   ›Reveal solutionSolution

   Patents and Trademarks are shown under the sub-head "Intangible Assets" (within Fixed Assets, under Non-Current Assets).

   As per the Schedule III format of the Balance Sheet (Companies Act, 2013), the asset side is classified as follows:

   II. Assets

   1. Non-current Assets

     (a) Fixed Assets

       (i) Tangible Assets — Land, Building, Plant & Machinery, Furniture & Fixtures, Vehicles (assets with physical existence)

       (ii) Intangible Assets — Goodwill, Patents, Trademarks, Copyrights, Computer Software (assets with NO physical existence but having a long-term, identifiable value to the business)

       (iii) Capital Work-in-Progress

       (iv) Intangible Assets under Development

   Patents and Trademarks are legal rights the company owns — they cannot be touched or seen, but they confer an exclusive, long-term economic benefit (the right to use an invention, a brand name, etc.), which is precisely what defines an "Intangible Asset." They therefore do NOT belong under Tangible Assets (which require physical existence) or under any Current Asset head (since they are not expected to be converted to cash/consumed within the normal operating cycle).

   ✓Final answer

   Patents and Trademarks appear under the sub-head "Intangible Assets" in the Company's Balance Sheet as per Schedule III.

8. CBSE 2025Set 67/6/11 markMCQ
   Q.There are two statements : Statement I : The balance in the Statement of Profit and Loss in the Balance Sheet of Samta Ltd. showed a deficit of ₹ 2,00,000 on 31.03.2023 and a surplus of ₹ 3,00,000 on 31.3.2024. ₹ 5,00,000 will be considered as profit earned during the year for preparing Cash Flow Statement. Statement II : On 31.03.2023 the goodwill account of Zeeta Ltd. showed a balance of ₹ 4,00,000 and on 31.03.2024 it showed a balance of ₹ 5,00,000. ₹ 1,00,000 will be considered as goodwill acquired during the year for the preparation of Cash Flow Statement. Choose the correct option from the following : (A) Both the Statements are true. (B) Both the Statements are false. (C) Statement I is true, Statement II is false. (D) Statement II is true, Statement I is false.

   ›Reveal solutionSolution

   Both Statement I, which calculates the profit earned during the year for Cash Flow Statement purposes, and Statement II, which identifies goodwill acquired during the year, are correct based on standard accounting principles.

   Let's break down each statement to understand the underlying accounting concepts and their treatment in the preparation of a Cash Flow Statement.

   Concept and Treatment

   Statement I: Profit and Loss Balance for Cash Flow Statement

   The Statement of Profit and Loss (P&L) balance shown in the Balance Sheet represents the accumulated profits or losses of the company up to that date. When preparing a Cash Flow Statement (CFS) using the indirect method, we need to determine the profit earned during the current year to arrive at the Net Profit Before Tax and Extraordinary Items. This figure is crucial because it forms the starting point for adjusting non-cash items and non-operating items to calculate cash flow from operating activities.

   If the P&L balance shifts from a deficit (an accumulated loss, which is a debit balance) to a surplus (an accumulated profit, which is a credit balance), the profit generated during the year must have been sufficient to first cover the entire opening deficit and then create the closing surplus. The sum of these two amounts represents the total profit available for appropriation during the year.

   Statement II: Goodwill Account for Cash Flow Statement

   Goodwill is an intangible asset. An increase in the balance of any asset account, including goodwill, generally indicates that the asset has been acquired during the accounting period. In the context of a Cash Flow Statement, the acquisition of an asset (whether tangible like machinery or intangible like goodwill) is classified as a cash outflow under Investing Activities. This is because cash is used to purchase long-term assets that are expected to generate future economic benefits for the business. Conversely, a decrease in goodwill could be due to its amortisation (a non-cash expense) or its sale (a cash inflow).

   Working Notes

   1. Working Note 1: Calculation of Profit Earned During the Year (Statement I)

      • Opening Balance of Statement of Profit and Loss (as on 31.03.2023) = Deficit of ₹ 2,00,000 (This is a debit balance).
      • Closing Balance of Statement of Profit and Loss (as on 31.03.2024) = Surplus of ₹ 3,00,000 (This is a credit balance).

      To calculate the profit earned during the year, we need to determine the total change from the opening deficit to the closing surplus.

      • Amount of profit required to cover the opening deficit = ₹ 2,00,000
      • Amount of profit required to create the closing surplus = ₹ 3,00,000
      • Total Profit Earned During the Year = ₹ 2,00,000 (to cover deficit) + ₹ 3,00,000 (to create surplus) = ₹ 5,00,000.

      This ₹ 5,00,000 represents the profit generated by the company during the year, which would be used as a component in calculating Net Profit Before Tax and Extraordinary Items for the Cash Flow Statement.

      Therefore, Statement I is true.

   2. Working Note 2: Calculation of Goodwill Acquired During the Year (Statement II)

      • Opening Balance of Goodwill Account (as on 31.03.2023) = ₹ 4,00,000
      • Closing Balance of Goodwill Account (as on 31.03.2024) = ₹ 5,00,000

      The change in the goodwill balance indicates acquisition or disposal.

      • Increase in Goodwill Balance = Closing Balance - Opening Balance
      • Increase in Goodwill Balance = ₹ 5,00,000 - ₹ 4,00,000 = ₹ 1,00,000.

      An increase in the goodwill account balance signifies that goodwill has been acquired during the year. This acquisition would be treated as a cash outflow under Investing Activities in the Cash Flow Statement.

      Therefore, Statement II is true.

   Conclusion

   Based on the detailed analysis and calculations in the working notes, both Statement I and Statement II are found to be correct.

   ✓Final answer

   Both Statement I and Statement II are true. Therefore, the correct option is (A) Both the Statements are true.

9. CBSE 2025Set MARCH1 mark
   Q.Under which head goodwill is shown in the balance-sheet?

   ›Reveal solutionSolution

   Goodwill appears under Non-current Assets, sub-head Fixed Assets — Intangible Assets, in a company's balance sheet (Schedule III).

   In GSEB Class-12 Commerce Accountancy (Financial Statements of a Company):

   • Under the equity-and-liabilities/assets format, goodwill is an intangible asset.

   • It is disclosed under Non-current Assets → Property, Plant & Equipment and Intangible Assets → Intangible Assets.

   • Being long-term in nature, it is never shown among current assets.

   ✓Final answer

   Goodwill is shown under the head Non-current Assets, sub-head Fixed Assets – Intangible Assets.

10. CBSE 2025Set MARCH1 mark
    Q.Give an example for non-current liabilities.

    ›Reveal solutionSolution

    Example of a non-current liability: long-term borrowings such as debentures or a long-term loan.

    Under Schedule III of the Companies Act, 2013, non-current liabilities are those that do not fall due for payment within twelve months (or the operating cycle). They include long-term borrowings (debentures, bonds, long-term loans from banks/financial institutions), long-term provisions and deferred tax liabilities. Any one of these is a correct example.

    ✓Final answer

    Long-term borrowings (for example, debentures or a long-term loan).

11. CBSE 2025Set ANNUAL1 markMCQ
    Q.Provision for Tax is (A) Current liabilities (B) Internal reserve (C) Both (A) and (B) (D) None of these

    ›Reveal solutionSolution

    Provision for tax is created by charging profit to meet a known future tax obligation; it is shown as a current liability and also represents an internal reserve (a provision out of profits). Hence the answer is (C) Both (A) and (B).

    For Bihar Class-12 (BSEB Inter) commerce candidates:

    • As a current liability: tax on the year's profit is expected to be paid within the near future, so provision for tax is shown among current liabilities (short-term provisions) in the company's Balance Sheet.
    • As an internal reserve: it is an amount retained out of profits to meet a liability, so in cash flow and funds analysis it is often treated as an appropriation of profit (an internal reserve) and added back when computing profit before tax.

    Since both descriptions are valid, the correct option is (C) Both (A) and (B).

    ✓Final answer

    (C) Both (A) and (B).

12. CBSE 2025Set ANNUAL1 markMCQ
    Q.Patents and copyrights fall under which category ? (A) Current Assets (B) Liquid Assets (C) Intangible Assets (D) All of these

    ›Reveal solutionSolution

    Patents and copyrights are long-term rights owned by the business that have value but no physical form, which makes them intangible assets. Hence the answer is (C) Intangible Assets.

    For the BSEB Inter / Bihar Class-12 Accountancy syllabus, assets are classified by their nature:

    • Tangible assets: have physical existence (land, building, plant, machinery).
    • Intangible assets: have no physical existence but give long-term benefits and are owned by the business — goodwill, patents, copyrights, trademarks, computer software.

    Patents (exclusive rights to an invention) and copyrights (exclusive rights to a literary or artistic work) are valuable, non-physical, long-term assets, shown under fixed assets as intangible assets in the Balance Sheet. They are not current or liquid assets. Hence option (C).

    ✓Final answer

    (C) Intangible Assets.