Class XII

A liability is classified as current when it satisfies the following conditions except
  1. It is held for the purpose of being traded
  2. It is expected to be settled in the company’s normal operating cycle
  3. It is due to be settled beyond 12 months
  4. The company does not have an unconditional right to offer settlement of the liability for at least 12 months after the reporting date
Comparative Financial Statement is an example of
  1. Horizontal analysis
  2. External analysis
  3. Internal Analysis
  4. Vertical Analysis
Why government is interested in analysis financial statement
  1. To know whether the business is able to pay debt
  2. To know the liquidity of business
  3. To Compile National Income and taxes and policy making.
  4. To know the earning capacity
Statement of Profit and Loss is important as
  1. Assess long term liabilities
  2. It ascertain the net profit and net loss
  3. Reflects the true position of the assets and liabilities
  4. Prepared by the Auditors
If Statement of profit and loss shows a negative balance, it will be shown under ……
  1. Other Current Liabilities
  2. Reserves and Surplus
  3. Current Assets
  4. Short term borrowings
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LKG - 12th

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