CUET UG Accountancy Booster Test 2 Meaning & Introduction -

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CUET UG Accountancy Booster Test 1 Meaning & Introduction

⏱️ 30 Minutes

❓ 20 Questions

📌 Answers are locked once submitted — results and explanations appear at the end.

CUET UG Accountancy Booster Test 1 Meaning & Introduction

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QUESTION 1 OF 20

Which statements are correct?
1. Financial statements do not include Cash Flow Statements.
2. Financial statements are formal annual reports.
3. Financial statements communicate financial information to owners.

Answer Review

1 Which statements are correct?
1. Financial statements do not include Cash Flow Statements.
2. Financial statements are formal annual reports.
3. Financial statements communicate financial information to owners.

A 1 and 2 are correct.

B 2 and 3 are correct.

C 1 and 3 are correct.

D 1, 2, and 3 are correct.

💡 Short Explanation

�� Financial statements include Cash Flow Statements. �� They are formal annual reports. �� They communicate financial information to owners and other users.

✅ Correct Answer Explanation

Financial statements are formal reports prepared by a business to communicate financial information to various stakeholders such as owners, investors, creditors, government authorities, and management. They normally include the Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, and Notes to Accounts. Therefore, statement 1 is incorrect because Cash Flow Statements are part of financial statements. Statements 2 and 3 correctly describe the nature and purpose of financial statements.

❓ Why Other Options Are Incorrect

�� Option A → Statement 1 is incorrect because Cash Flow Statements are included in financial statements.
�� Option C → Statement 1 is incorrect.
�� Option D → All three statements are not correct because statement 1 is false.

🎯 Strategy

Used: Elimination

Application: Eliminate options containing Statement 1 because it is incorrect.

Final Logic: Statements 2 and 3 are true while Statement 1 is false.

🧠 Memory Trick

FS = BS + P&L + CF (Financial Statements include Cash Flow)

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Meaning of Financial Statements – Page X

2 Assertion (A): Financial statements report the performance of management to shareholders.
Reason (R): This helps understand gaps between management performance and ownership expectations.

A Both A and R are true and R is the correct explanation of A.

B Both A and R are true but R is not the correct explanation of A.

C A is true, but R is false.

D A is false, but R is true.

💡 Short Explanation

�� Shareholders evaluate management performance. �� Financial statements provide this information. �� The reason correctly explains the assertion.

✅ Correct Answer Explanation

Financial statements serve as a communication link between management and shareholders. Shareholders invest capital but do not usually manage day-to-day operations. Through financial statements, they can assess how effectively management has utilized resources. This enables them to compare actual performance with expectations and identify any gaps. Therefore, both the assertion and reason are true, and the reason correctly explains the assertion.

❓ Why Other Options Are Incorrect

�� Option B → The reason directly explains the assertion.
�� Option C → The reason is not false.
�� Option D → Both statements are true.

🎯 Strategy

Used: Contextual/Tonal Matching

Application: Check whether the reason logically explains the assertion.

Final Logic: The reason provides the purpose behind reporting management performance.

🧠 Memory Trick

Owners Judge Managers

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Purpose of Financial Statements – Page X

3 Match the Balance Sheet categories with their correct examples:

List 1	List 2
1. Tangible Assets	a. Motor vehicles
2. Intangible Assets	b. Goodwill
3. Non-Current Liabilities	c. Long-term borrowings
4. Current Assets	d. Trade receivables

A 1-a, 2-b, 3-c, 4-d

B 1-c, 2-a, 3-d, 4-b

C 1-b, 2-d, 3-a, 4-c

D 1-d, 2-c, 3-b, 4-a

💡 Short Explanation

�� Motor vehicles are tangible assets. �� Goodwill is an intangible asset. �� Long-term borrowings are non-current liabilities. �� Trade receivables are current assets.

✅ Correct Answer Explanation

Tangible assets have physical existence such as motor vehicles. Intangible assets lack physical form but provide future benefits, such as goodwill. Non-current liabilities are obligations payable after one year, such as long-term borrowings. Current assets are expected to be realized within one year, such as trade receivables. Therefore, the correct matching is 1-d, 2-c, 3-b, and 4-a.

❓ Why Other Options Are Incorrect

�� Option A → Incorrect classification of all categories.
�� Option B → Goodwill and trade receivables are wrongly matched.
�� Option C → Borrowings and motor vehicles are incorrectly classified.

🎯 Strategy

Used: Option Grouping

Application: Match each item with its standard accounting classification.

Final Logic: Only Option D gives all correct pairings.

🧠 Memory Trick

MV = Tangible, GW = Intangible

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Balance Sheet Components – Page X

4 Arrange the items as they appear vertically in the Statement of Profit and Loss format:
1. Expenses
2. Total Revenue
3. Revenue from operations
4. Profit before tax

A 1, 2, 3, 4

B 3, 1, 2, 4

C 3, 2, 1, 4

D 4, 3, 2, 1

💡 Short Explanation

�� Revenue from operations appears first. �� Total revenue is calculated. �� Expenses are deducted. �� Profit before tax is obtained.

✅ Correct Answer Explanation

The Statement of Profit and Loss begins with Revenue from Operations, followed by Other Income to determine Total Revenue. Expenses are then deducted from Total Revenue to calculate Profit Before Tax. Hence the correct order is 3, 2, 1, 4.

❓ Why Other Options Are Incorrect

�� Option A → Starts with expenses incorrectly.
�� Option B → Expenses cannot appear before total revenue.
�� Option D → Profit before tax appears at the end.

🎯 Strategy

Used: Elimination

Application: Identify the logical flow of profit determination.

Final Logic: Revenue comes first, expenses later, profit last.

🧠 Memory Trick

Revenue → Total Revenue → Expenses → PBT

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Statement of Profit and Loss – Page X

5 A company wants to evaluate potential cash flows in terms of amount, timing, and related uncertainties. Which specific objective of financial statements does this fulfill?

A Providing information about cash flows.

B Judging effectiveness of management.

C Disclosing accounting policies.

D Providing qualitative employee data.

💡 Short Explanation

�� Cash flow information assists prediction. �� It focuses on amount, timing, and uncertainty. �� It helps users make economic decisions.

✅ Correct Answer Explanation

One objective of financial statements is to provide information about future cash-generating ability. Users need information about the amount, timing, and uncertainty of cash flows to assess investment and financing decisions. Therefore, Option A is correct.

❓ Why Other Options Are Incorrect

�� Option B → Focuses on management performance.
�� Option C → Relates to disclosure, not cash flow evaluation.
�� Option D → Financial statements generally do not provide qualitative employee information.

🎯 Strategy

Used: Contextual/Tonal Matching

Application: Identify keywords "amount, timing, uncertainty".

Final Logic: These terms directly relate to cash flow information.

🧠 Memory Trick

Cash Flow = Amount + Timing + Risk

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Cash Flow Information – Page X

6 Movements of funds are tracked to primarily assist internal management with which functions?

A Tax evasion and hiding assets.

B Replacing the historical cost concept.

C Determining the market price of individual fixed assets.

D Planning, decision-making, and control.

💡 Short Explanation

�� Fund movement information supports management. �� Helps planning and control. �� Aids informed decisions.

✅ Correct Answer Explanation

Internal management uses financial information to plan future operations, make strategic decisions, and exercise control over business activities. Monitoring fund movements provides essential information for budgeting, forecasting, and evaluating performance.

❓ Why Other Options Are Incorrect

�� Option A → Illegal and unrelated purpose.
�� Option B → Does not replace accounting concepts.
�� Option C → Not the primary objective.

🎯 Strategy

Used: Elimination

Application: Remove options that are unethical or unrelated to management functions.

Final Logic: Fund flow information supports planning, decision-making, and control.

🧠 Memory Trick

Funds → Plan → Decide → Control

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Uses of Financial Information – Page X

7 Regarding users of financial statements, which statements are true?
1. Internal users include management seeking to plan and control.
2. Financial statements only cater to external users.
3. They provide basic input for government fiscal policies.

A 1 and 2 are true.

B 2 and 3 are true.

C 1 and 3 are true.

D All are true.

💡 Short Explanation

�� Management is an internal user. �� Government uses financial statements for policy decisions. �� Statements are not only for external users.

✅ Correct Answer Explanation

Internal users include management, who rely on financial statements for planning and control. Governments also use financial information while framing fiscal and taxation policies. Statement 2 is false because financial statements serve both internal and external users.

❓ Why Other Options Are Incorrect

�� Option A → Statement 2 is false.
�� Option B → Statement 2 is false.
�� Option D → Not all statements are correct.

🎯 Strategy

Used: Elimination

Application: Identify the incorrect statement first.

Final Logic: Statement 2 is false; Statements 1 and 3 are true.

🧠 Memory Trick

M & G Use FS (Management and Government)

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Users of Financial Statements – Page X

8 Match the external users with their primary use for financial statements:

List 1	List 2
1. Investors	a. Assess short-term and long-term solvency
2. Trade Associations	b. Design uniform system of accounts
3. Stock Exchanges	c. Call for required information for transparency
4. Government	d. Fiscal and taxation policies

A 1-d, 2-c, 3-b, 4-a

B 1-c, 2-d, 3-b, 4-a

C 1-a, 2-b, 3-c, 4-d

D 1-b, 2-a, 3-d, 4-c

💡 Short Explanation

�� Investors assess solvency. �� Trade associations encourage uniform accounting. �� Stock exchanges ensure transparency. �� Government frames policies.

✅ Correct Answer Explanation

Investors use financial statements to assess solvency and profitability. Trade associations use them to promote uniform accounting systems. Stock exchanges seek transparency and disclosure. Governments use financial data for fiscal and taxation policies. Hence Option B is correct.

❓ Why Other Options Are Incorrect

�� Option A → Investors and trade associations are mismatched.
�� Option C → Multiple incorrect pairings.
�� Option D → Government and investors are incorrectly matched.

🎯 Strategy

Used: Option Grouping

Application: Match users with their primary objectives.

Final Logic: Only Option B correctly pairs all users.

🧠 Memory Trick

Investor–Solvency, Government–Tax

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: External Users – Page X

9 When preparing a balance sheet, what prevails if there is a conflict between Schedule III of the Companies Act, 2013 and Accounting Standards?

A Schedule III prevails over Accounting Standards.

B The matter is ignored.

C Personal judgement of the auditor prevails.

D Accounting standards shall prevail over Schedule III.

💡 Short Explanation

�� Accounting Standards ensure uniformity. �� Standards override conflicting Schedule III provisions. �� Compliance is mandatory.

✅ Correct Answer Explanation

Where any conflict exists between Schedule III requirements and Accounting Standards, the Accounting Standards prevail. This ensures consistency, comparability, and faithful representation of financial information.

❓ Why Other Options Are Incorrect

�� Option A → Opposite of the prescribed rule.
�� Option B → Conflicts cannot be ignored.
�� Option C → Auditor judgement cannot override standards.

🎯 Strategy

Used: Direct Concept Recall

Application: Recall the legal requirement regarding Accounting Standards.

Final Logic: Accounting Standards have overriding authority.

🧠 Memory Trick

AS > Schedule III

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Preparation of Financial Statements – Page X

10 Consider the following about legal requirements of financial statements:
1. They apply to all Indian companies preparing statements as per Schedule III.
2. Insurance and Banking companies have different specific formats.
3. Rounding off requirements are strictly optional.

A 1 and 3 are correct.

B 1 and 2 are correct.

C 2 and 3 are correct.

D 1, 2, and 3 are correct.

💡 Short Explanation

�� Schedule III applies to companies. �� Banking and insurance companies follow special formats. �� Rounding-off provisions are regulated, not merely optional.

✅ Correct Answer Explanation

Indian companies generally prepare financial statements according to Schedule III of the Companies Act, 2013. Banking, insurance, and certain other entities have industry-specific formats and regulatory requirements. Statement 3 is incorrect because rounding-off provisions are governed by legal requirements and cannot simply be treated as optional.

❓ Why Other Options Are Incorrect

�� Option A → Statement 3 is false.
�� Option C → Statement 1 is true.
�� Option D → Statement 3 is incorrect.

🎯 Strategy

Used: Elimination

Application: Identify the false statement.

Final Logic: Statements 1 and 2 are true; Statement 3 is false.

🧠 Memory Trick

Companies → Schedule III; Banks → Special Rules

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Legal Requirements – Page X

11 Assertion (A): Financial statements are prepared for a defined period of time.
Reason (R): This helps reveal the financial position as on a date and the financial results obtained during that period.

A Both A and R are true and R is the correct explanation of A.

B Both A and R are true but R is not the correct explanation of A.

C A is true, but R is false.

D A is false, but R is true.

💡 Short Explanation

�� Financial statements relate to a specific accounting period. �� They show financial position and performance. �� The reason correctly explains the assertion.

✅ Correct Answer Explanation

Financial statements are periodic reports prepared for a specific accounting period, usually one year. The Balance Sheet shows the financial position on a particular date, while the Statement of Profit and Loss reflects performance during the accounting period. Therefore, both the assertion and reason are true, and the reason correctly explains the assertion.

❓ Why Other Options Are Incorrect

�� Option B → The reason directly explains the assertion.
�� Option C → The reason is true.
�� Option D → Both statements are true.

🎯 Strategy

Used: Contextual/Tonal Matching

Application: Check whether the reason logically supports the assertion.

Final Logic: Periodic reporting exists to show position and performance for a defined period.

🧠 Memory Trick

Period → Position + Performance

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Nature of Financial Statements – Periodic Reports – Page X

12 Financial statements contain only recorded facts expressed in terms of money. Therefore, they fail to provide qualitative information such as industrial relations or employee satisfaction. This represents a:

A Major objective of financial statements.

B Legal requirement.

C Limitation of financial statements.

D Principle of cost convention.

💡 Short Explanation

�� Financial statements focus on monetary information. �� Qualitative factors cannot be measured easily. �� This is a limitation of financial reporting.

✅ Correct Answer Explanation

Financial statements record only transactions and events that can be expressed in monetary terms. Important qualitative factors such as employee morale, industrial relations, management quality, and customer satisfaction are not included. Therefore, the inability to capture non-monetary information is considered a limitation of financial statements.

❓ Why Other Options Are Incorrect

�� Option A → This is not an objective.
�� Option B → It is not a legal requirement.
�� Option D → Cost convention relates to asset valuation.

🎯 Strategy

Used: Direct Concept Recall

Application: Recall the limitations of financial statements.

Final Logic: Exclusion of qualitative information is a recognized limitation.

🧠 Memory Trick

No Money = No Reporting

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Limitations of Financial Statements – Page X

📄 Passage

"Under more than one circumstance, facts and figures presented through financial statements are based on personal opinion, estimates and judgements. The depreciation is provided taking into consideration the useful economic life of fixed assets. Provisions for doubtful debts are made on estimates and personal judgements."

Why are personal judgements and estimates used while reporting financial facts according to the passage?

A To artificially inflate the value of assets.

B To completely ignore historical costs.

C To bypass accounting standards.

D To determine items like depreciation and provisions based on useful life and estimates.

💡 Short Explanation

�� Some accounting figures require estimates. �� Depreciation depends on useful life. �� Provisions depend on expected losses.

✅ Correct Answer Explanation

Financial statements often require professional judgement because exact values are not always available. Depreciation is calculated based on the estimated useful economic life of assets, while provisions for doubtful debts depend on estimates regarding future recoverability. Therefore, personal judgement is used to make reasonable accounting estimates.

❓ Why Other Options Are Incorrect

�� Option A → Judgements are not used to inflate assets.
�� Option B → Historical cost is not ignored.
�� Option C → Judgements are made within accounting standards.

🎯 Strategy

Used: Contextual/Tonal Matching

Application: Focus on keywords "depreciation," "useful life," and "provisions."

Final Logic: Estimates are required for depreciation and doubtful debts.

🧠 Memory Trick

Depreciation = Estimated Life

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Estimates and Judgements in Financial Statements – Page X

📄 Passage

Which specific accounting convention is kept in mind while making these personal judgements to aid accurate decision-making and avoid overstatement of assets?

A Convention of conservatism

B Money measurement postulate

C Going concern postulate

D Convention of materiality

💡 Short Explanation

�� Conservatism avoids overstatement. �� Expected losses are recognized. �� Assets and income are not overstated.

✅ Correct Answer Explanation

The convention of conservatism requires accountants to anticipate possible losses but not unrealized gains. Provisions for doubtful debts and cautious estimates of depreciation are examples of conservatism. This principle helps prevent overstatement of assets and profits and improves the reliability of financial statements.

❓ Why Other Options Are Incorrect

�� Option B → Relates to recording only measurable monetary items.
�� Option C → Assumes business continuity.
�� Option D → Relates to significance of information.

🎯 Strategy

Used: Direct Concept Recall

Application: Identify the accounting principle associated with prudence and caution.

Final Logic: Conservatism prevents overstatement of assets and income.

🧠 Memory Trick

Conservatism = Be Cautious

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Convention of Conservatism – Page X

15 In a balance sheet, if Share Capital is Rs. 50,00,000, Reserve and Surplus is Rs. 1,30,000, and Long-term Borrowings are Rs. 10,00,000, what is the total of Equity and Non-current Liabilities calculated together?

A Rs. 50,00,000

B Rs. 11,30,000

C Rs. 61,30,000

D Rs. 71,30,000

💡 Short Explanation

�� Equity = Share Capital + Reserves. �� Add Long-term Borrowings. �� Total = Rs. 61,30,000.

✅ Correct Answer Explanation

Shareholders' Funds = Rs. 50,00,000 + Rs. 1,30,000 = Rs. 51,30,000 Add Long-term Borrowings = Rs. 10,00,000 Total Equity and Non-current Liabilities = Rs. 61,30,000 Therefore, Option C is correct.

❓ Why Other Options Are Incorrect

�� Option A → Excludes reserves and borrowings.
�� Option B → Ignores share capital.
�� Option D → Incorrect total.

🎯 Strategy

Used: Substitution

Application: Substitute values directly into the balance sheet classification.

Final Logic: 50,00,000 + 1,30,000 + 10,00,000 = 61,30,000.

🧠 Memory Trick

Equity + Long-term Debt = Total Long-term Funds

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Equity and Liabilities – Page X

16 How is 'Profit before tax' fundamentally calculated in the Statement of Profit and Loss?

A Total Revenue + Total Expenses

B Total Revenue - Total Expenses

C Revenue from operations - Other income

D Cost of materials consumed + Employee benefits

💡 Short Explanation

�� Revenue generates earnings. �� Expenses reduce earnings. �� Difference gives Profit Before Tax.

✅ Correct Answer Explanation

Profit Before Tax (PBT) represents the profit earned before deduction of income tax. It is obtained by subtracting total expenses from total revenue. This is the fundamental principle underlying the Statement of Profit and Loss.

❓ Why Other Options Are Incorrect

�� Option A → Expenses are deducted, not added.
�� Option C → Ignores expenses.
�� Option D → Includes only certain expenses.

🎯 Strategy

Used: Direct Concept Recall

Application: Recall the profit formula.

Final Logic: Profit equals revenue minus expenses.

🧠 Memory Trick

Profit = Revenue – Expense

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Statement of Profit and Loss – Page X

17 Order the broad headings under 'Equity and Liabilities' as summarised in the Balance Sheet:
1. Current Liabilities
2. Non-current Liabilities
3. Shareholder's Funds
4. Share Application Money Pending Allotment

A 3, 4, 2, 1

B 1, 2, 3, 4

C 3, 2, 1, 4

D 4, 3, 2, 1

💡 Short Explanation

�� Shareholders' Funds appear first. �� Followed by Share Application Money. �� Then Non-current and Current Liabilities.

✅ Correct Answer Explanation

Under Schedule III, Equity and Liabilities are presented in the order: 1. Shareholders' Funds 2. Share Application Money Pending Allotment 3. Non-current Liabilities 4. Current Liabilities Therefore, the correct sequence is 3, 4, 2, 1.

❓ Why Other Options Are Incorrect

�� Option B → Completely incorrect order.
�� Option C → Omits proper placement of share application money.
�� Option D → Begins incorrectly.

🎯 Strategy

Used: Direct Concept Recall

Application: Recall Schedule III presentation format.

Final Logic: Shareholders' Funds always appear first.

🧠 Memory Trick

SF → SAM → NCL → CL

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Balance Sheet Format – Page X

18 Assertion (A): Financial statements show the exact current market condition of the concern.
Reason (R): Assets are recorded at their historical cost and not current market prices.

A Both A and R are true.

B A is true, but R is false.

C A is false, but R is true.

D Both A and R are false.

💡 Short Explanation

�� Financial statements use historical cost. �� Current market values are generally not shown. �� Therefore exact market condition is not reflected.

✅ Correct Answer Explanation

Financial statements are prepared using historical cost accounting. Assets are generally recorded at their acquisition cost rather than their current market value. As a result, financial statements may not show the exact present market condition of the business. Therefore, the assertion is false while the reason is true.

❓ Why Other Options Are Incorrect

�� Option A → Assertion is false.
�� Option B → Reason is true.
�� Option D → Reason is not false.

🎯 Strategy

Used: Contextual/Tonal Matching

Application: Compare historical cost accounting with current market values.

Final Logic: Historical cost prevents exact market-value representation.

🧠 Memory Trick

Books ≠ Market Value

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Limitations of Financial Statements – Page X

19 Which of the following is NOT classified as a sub-head under 'Current Assets' in the prescribed Balance Sheet format?

A Inventories

B Cash and cash equivalents

C Trade receivables

D Intangible assets under development

💡 Short Explanation

�� Intangible assets are non-current assets. �� Current assets are expected to be realized within one year. �� Hence Option D is not a current asset.

✅ Correct Answer Explanation

Current Assets include inventories, trade receivables, cash and cash equivalents, and other current assets. Intangible assets under development are categorized as non-current assets because they are intended for long-term use and not expected to be converted into cash within one year.

❓ Why Other Options Are Incorrect

�� Option A → Inventory is a current asset.
�� Option B → Cash is a current asset.
�� Option C → Trade receivables are current assets.

🎯 Strategy

Used: Odd One Out

Application: Identify the item belonging to a different asset category.

Final Logic: Intangible assets under development are non-current assets.

🧠 Memory Trick

Current = Cash Soon

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Current Assets – Page X

20 Match the items with their correct disclosure rules in Notes to Accounts:

List 1	List 2
1. Contingent Liability	a. Proposed dividend (AS-4)
2. Share Capital	b. Rights and restrictions attached to each class
3. Trade Payables	c. Settled beyond 12 months/operating cycle
4. Fixed Assets	d. Tangible and Intangible breakdown

A 1-a, 2-b, 3-c, 4-d

B 1-b, 2-a, 3-d, 4-c

C 1-c, 2-d, 3-a, 4-b

D 1-d, 2-c, 3-b, 4-a

💡 Short Explanation

�� Contingent liabilities include proposed dividend disclosures. �� Share capital requires rights and restrictions disclosure. �� Trade payables require maturity classification. �� Fixed assets require tangible/intangible breakup.

✅ Correct Answer Explanation

Under Notes to Accounts: Contingent liabilities include disclosures such as proposed dividends where applicable. Share Capital requires disclosure of rights, preferences, and restrictions attached to shares. Trade Payables require classification based on settlement periods. Fixed Assets are disclosed separately as tangible and intangible assets. Therefore, the correct matching is 1-b, 2-a, 3-d, 4-c.

❓ Why Other Options Are Incorrect

�� Option A → Incorrect matching of all major categories.
�� Option C → Share capital and fixed assets are wrongly matched.
�� Option D → Multiple disclosures are incorrectly assigned.

🎯 Strategy

Used: Option Grouping

Application: Match each disclosure requirement with the corresponding account heading.

Final Logic: Only Option B correctly pairs all disclosures.

🧠 Memory Trick

Capital → Rights, Assets → Breakdown

📚 Class XII – Accountancy Part II – Chapter: Financial Statements of a Company – Topic: Notes to Accounts – Page X

CUET UG Accountancy Booster Test 1 Meaning & Introduction

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