Question : Which of the following statements is correct?
Option 1: Assets = Funds of outsiders
Option 2: Assets = Liabilities + Shareholders funds
Option 3: Assets = Total funds
Option 4: None of the above
Correct Answer: Assets = Liabilities + Shareholders funds
Solution : The company's significant resources are represented by its assets. Their responsibilities are represented by the liabilities. Liabilities and shareholders' equity both show how a corporation finances its assets.
Hence the correct answer is option 2.
Question : Which of the following statements is false?
Option 1: Total Assets = Fixed Assets + Non-current Investments + Current Assets
Option 2: Long-term Borrowings or Debt = Total Borrowing - Short-term Borrowings
Option 3: Total Assets = Shareholders Funds + Long term Borrowings + Short term Borrowings + Other Current liabilities
Option 4: None of the above.
Question : Shareholders' Funds Rs. 14,00,000; Total Debts (Liabilities) Rs. 18,00,000; Current Liabilities Rs. 2,00,000. Total Assets to Debt Ratio will be
Option 1: 3:2
Option 2: 2:1
Option 3: 2.5:1
Question : Which of the following statements is incorrect?
Option 1: Working Capital = Current Assets - Current Liabilities
Option 2: Current Liabilities = Total Assets - Non-Current Liabilities - Shareholder's fund
Option 3: Working Capital = Equity Share Capital + Reserves & Surplus - Long Term Loan - Non-Current Assets
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