CUET UG Categorised PYQ Accountancy Unit 8
Accountancy
📌 Answers are locked once submitted — results and explanations appear at the end.
QUESTION 1 OF 8
Identify the correct sequence to find out profit after tax while preparing comparative income statement:
A. Deduct expenses
B. Find out total revenue by adding other incomes to revenue from operations
C. Find out profit after tax
D. Deduct tax
E. Calculate profit before tax
Choose the correct answer from the options given below: (PYQ 2022)
QUESTION 2 OF 8
Common size analysis is also known as (PYQ 2022)
QUESTION 3 OF 8
While preparing common-size Balance Sheet, each item of Balance Sheet is expressed as % of (PYQ 2022)
QUESTION 4 OF 8
As per the Financial Statement of X Ltd, its shareholders' funds are ₹25,00,000. Non-current liabilities are ₹4,80,000 and current liabilities are ₹10,00,000. Non-current assets are ₹13,80,000. Working capital of the company is: (PYQ 2023)
QUESTION 5 OF 8
Which of the following item is not a tool of financial statement analysis? (PYQ 2023)
QUESTION 6 OF 8
Match List I with List II:
| LIST I | LIST II |
|---|---|
| A. Horizontal Analysis | I. Common size statement |
| B. Vertical Analysis | II. Comparative statement |
| C. External Analysis | III. Access to all published and unpublished information |
| D. Internal Analysis | IV. Access only to published information |
QUESTION 7 OF 8
Calculate amount of Profit after Tax if Revenue from Operation ₹4,00,000; Cost of Revenue from Operations is 20% of Revenue from Operations. Tax rate @ 50%. (PYQ 2024)
QUESTION 8 OF 8
Which one of the following are correct in connection with the Common Size Statement?
(PYQ 2024)
Test Complete!
Answer Review
1 Identify the correct sequence to find out profit after tax while preparing comparative income statement:
A. Deduct expenses
B. Find out total revenue by adding other incomes to revenue from operations
C. Find out profit after tax
D. Deduct tax
E. Calculate profit before tax
Choose the correct answer from the options given below: (PYQ 2022)
Start with Revenue (B). Subtract Expenses (A) to get Profit Before Tax (E). Subtract Tax (D) to get Profit After Tax (C).
(Detailed) The preparation of a Comparative Income Statement (Statement of Profit and Loss) follows a fixed mathematical flow: Revenue (B): • Total Income = Revenue from Operations + Other Income. Deduct Expenses (A): • Subtract all costs. Profit Before Tax (E): • Result of (Total Revenue − Total Expenses). Deduct Tax (D): • Apply the tax rate on the profit before tax. Profit After Tax (C): • Final bottom line.
- A) E, B, A, D, C
- Suggests calculating Profit Before Tax (E) before finding Revenue (B).
- C) B, E, A, C, D
- Suggests Profit Before Tax (E) comes before deducting Expenses (A).
- D) E, C, B, A, D
- Completely illogical sequence.
Used
- Substitution
- Step 1 → Must be Total Revenue (B). Only Options B and C start with B.
- Step 2 → To get Profit (E), you must first subtract Expenses (A). Only Option B follows B → A → E.
- Final Answer → B
R-E-P-T: Revenue - Expenses = Profit, then Tax.
2 Common size analysis is also known as (PYQ 2022)
Common size statements compare items within a single year. Each item is expressed as a percentage of a common base (e.g., Net Sales). The comparison moves from top to bottom (Vertical).
(Detailed) Common Size Analysis is termed Vertical Analysis because it looks at the relationship between different items in a financial statement for a single period. For a Balance Sheet, the total assets/liabilities are taken as 100, and for a Statement of Profit and Loss, Revenue from Operations is taken as 100. All other figures are calculated as a percentage of that base, allowing for internal structural comparison.
- A) Horizontal Analysis
- This is "Comparative Analysis," where items are compared across multiple years (left to right).
- C) Cash Flow Analysis
- This is a specific tool to study liquidity, not a general classification of statement analysis.
- D) Ratio Analysis
- While related, ratio analysis involves calculating specific relationships (like current ratio), whereas common size is a total structural percentage breakdown.
Used
- Odd One Out
- Option A → Time-based (Years).
- Option B → Base-based (Percentage of Total).
- Option C → Specific statement.
- Final Answer → B
Common = Vertical: You look down the column to find the common base.
3 While preparing common-size Balance Sheet, each item of Balance Sheet is expressed as % of (PYQ 2022)
Common-size analysis requires a "base" figure of 100%. In a Balance Sheet, the "Total" represents the whole entity. Every individual component is compared to this total.
(Detailed) In a common-size Balance Sheet (Vertical Analysis), the goal is to see the composition of the firm's financial position. To do this, the Total Assets (or Total Liabilities/Equity, which are equal) is taken as the base (100%). Every other item, such as Inventories, Fixed Assets, or Long-term Loans, is then expressed as a percentage of that total to show its relative weight.
- A) Non-current assets
- This is only a sub-part of the assets; using it as a base would ignore the current assets.
- B) Current assets
- Using this as a base would only show the internal composition of liquidity, not the whole firm.
- C) Non-current liabilities
- This is a specific source of finance and cannot act as a base for the entire balance sheet.
Used
- Option Grouping
- Options A, B, C → Sub-headings (Partial).
- Option D → Grand Total (Complete).
- Final Answer → D
The Whole Pie: The Total is the whole pie (100%); everything else is just a slice (percentage).
4 As per the Financial Statement of X Ltd, its shareholders' funds are ₹25,00,000. Non-current liabilities are ₹4,80,000 and current liabilities are ₹10,00,000. Non-current assets are ₹13,80,000. Working capital of the company is: (PYQ 2023)
Total Assets = Shareholders' Funds + NCL + CL. Current Assets = Total Assets − Non-Current Assets. Working Capital = Current Assets − Current Liabilities.
(Detailed) → Step 1: Calculate Total Assets ₹25,00,000 + ₹4,80,000 + ₹10,00,000 = ₹39,80,000 → Step 2: Calculate Current Assets ₹39,80,000 − ₹13,80,000 = ₹26,00,000 → Step 3: Calculate Working Capital ₹26,00,000 − ₹10,00,000 = ₹16,00,000
- B) ₹29,80,000
- Represents Shareholders' Funds + Non-Current Liabilities.
- C) ₹33,80,000
- Incorrect calculation.
- D) ₹34,00,000
- Not obtained using the Working Capital formula.
Used
- Dimensional/Unit Analysis
- Find Total Assets.
- Find Current Assets.
- Apply Working Capital formula.
WC = CA − CL
5 Which of the following item is not a tool of financial statement analysis? (PYQ 2023)
Financial statement analysis uses tools. Statement of Profit and Loss is a financial statement. It provides data rather than analyzing data.
(Detailed) Financial Statement Analysis involves techniques such as: • Trend Analysis • Comparative Statements • Ratio Analysis • Cash Flow Analysis The Statement of Profit and Loss is a primary financial statement that provides information regarding revenues and expenses. It is not itself an analytical tool. Therefore, the correct answer is Statement of Profit and Loss.
- A) Trend Analysis
- Analytical technique.
- C) Cash Flow Statement
- Used extensively for liquidity analysis.
- D) Comparative Statements
- Standard analytical tool.
Used
- Odd One Out
- A, C and D help analyze.
- B is the source document.
Statements provide data; Tools analyze data.
6 Match List I with List II:
| LIST I | LIST II |
|---|---|
| A. Horizontal Analysis | I. Common size statement |
| B. Vertical Analysis | II. Comparative statement |
| C. External Analysis | III. Access to all published and unpublished information |
| D. Internal Analysis | IV. Access only to published information |
Horizontal analysis compares data over years (Comparative). Vertical analysis compares items within one year (Common Size). Internal users see everything; external users only see published information.
(Detailed) (A) Horizontal Analysis → (II) • Also known as Dynamic Analysis. Comparative Statements compare figures of multiple years. (B) Vertical Analysis → (I) • Also known as Static Analysis. Common Size Statements express each item as a percentage of a common base. (C) External Analysis → (IV) • Conducted by outsiders who only have access to published information. (D) Internal Analysis → (III) • Conducted by management with access to both published and unpublished information.
- A) A-I, B-II, C-III, D-IV
- Swaps Horizontal and Vertical Analysis.
- B) A-II, B-I, C-III, D-IV
- Reverses Internal and External access levels.
- D) A-III, B-IV, C-I, D-II
- Completely mismatches the classifications.
Used
- Option Grouping
- A-II & B-I are standard textbook pairings.
- C-IV = Outsiders get published information only.
- Final Answer → C
H-C, V-S: Horizontal = Comparative; Vertical = Size (Common Size).
7 Calculate amount of Profit after Tax if Revenue from Operation ₹4,00,000; Cost of Revenue from Operations is 20% of Revenue from Operations. Tax rate @ 50%. (PYQ 2024)
Revenue − Cost = Profit. Profit − Tax = Profit After Tax. Cost = 20%, so Profit Before Tax = 80%.
(Detailed) Revenue = ₹4,00,000 Cost of Revenue = 20% × ₹4,00,000 = ₹80,000 Profit Before Tax = ₹4,00,000 − ₹80,000 = ₹3,20,000 Tax = 50% × ₹3,20,000 = ₹1,60,000 Profit After Tax = ₹3,20,000 − ₹1,60,000 = ₹1,60,000
- A) ₹80,000
- Cost amount.
- B) ₹3,20,000
- Profit Before Tax.
- D) ₹2,00,000
- Incorrect tax calculation.
Used
- Substitution
- Calculate Cost.
- Find PBT.
- Deduct Tax.
50% Tax = Half the Profit.
8 Which one of the following are correct in connection with the Common Size Statement?
(PYQ 2024)
Common Size Statements use a common base. They are used for Vertical Analysis. Items are expressed as percentages.
(Detailed) → Revenue from Operations is the base in a Common Size Income Statement. → Total Assets is the base in a Common Size Balance Sheet. → Common Size Statements are examples of Vertical Analysis.
- A) Includes Horizontal Analysis.
- B) Includes Horizontal Analysis.
- D) Includes Horizontal Analysis and excludes Revenue from Operations.
Used
- Elimination
- Common Size = Vertical Analysis.
- Eliminate all options containing Horizontal Analysis.
- Final Answer → C
Common = Column (Vertical).