What is Balance Sheet? 
Ans. A balance sheet is a statement showing financial position of the firm at a particular date.


Q. 1. Attempt any Three of the following sub – questions.
(A) Answer the following questions in only ‘one’ sentence each. (5)
(1) What is Balance Sheet?

Ans. A balance sheet is a statement showing financial position of the firm at a particular date.
(2) What is gain ratio or benefit ratio?

Ans. Ratio by which remaining partners are benefited on retirement of any partner is known as Gain ratio or benefit ratio.

(3) What is authorised capital?

Ans. The authorised capital of a company is the maximum amount of share capital for which shares can be issued by a company. The initial authorised capital of the Company is mentioned in the Memorandum of Association of the Company and is usually Rs. 1 lakh.
(4) Who is a drawer?

Ans. A person who draws the bill is known as drawer.
(5) What is Statement of Affairs?

Ans. Ans. A statement which is prepared under the single entry system on the basis of estimated balances of various assets and liabilities is called ‘Statement of Affairs’.

(B) Write a word / term / phrase as a substitute for each of the following statements: (5)
(1) An association of two or more persons to carry on business.
(2) Payment of the bill before due date.
(3) The acknowledgement of debt under common seal of company.
(4) A bill which is drawn in India and payable in other country.
(5) Critical evaluation of financial statement to measure profitability.
(C) Select the most appropriate alternative from those given below and rewrite the statements. (5)
(1) The interest on drawings is transferred to _________ side of the Profit and Loss Account.
(a) debit
(b) credit
(c) assets
(d) liability
(2) If any asset is taken over by a partner from the firm, __________ account will be debited.
(a) capital
(b) revaluation
(d) profit and loss adjustment.
(3) If goodwill is raised to the extent of retiring partner’s share, ________ account is to be debited.
(a) cash
(b) Goodwill
(c) all partners’ capital
(d) retiring partner’s capital
(4) _________ extra days are allowed over and above the period of the bill.
(a) Two
(b) Three
(c) Five
(d) Ten
(5) In the statement of Profit or Loss, interest on capital is ___________
(a) shown as addition
(b) shown as subtraction.
(c) ignored
(d) multiplied
(D) State whether the following statements are True or False: (5)
(1) ‘Not for Profit’ concerns concentrate their efforts on maximizing their profit.  False
(2) On dissolution of a firm, Cash or Bank account is closed automatically. True
(3) A bill can’t be deposited into a bank for collection. False
(4) A person to whom or as per his order, amount of bill is payable is a payee. True
(5) Analysis of financial statement is a tool but not a remedy. True