P2 C4 ANALISIS OF FINANCIAL STATEMENT — Elements of Account STD 12 Commerce — Question
Gujarat BoardEnglish MediumSTD 12 CommerceElements of AccountP2 C4 ANALISIS OF FINANCIAL STATEMENT3 Marks
Question
Explain comparative statements.
✓
Answer
Analysis through comparative statements includes comparative balance sheet and comparative profit-loss statement $($income statement$).$
$(a)$ Comparative Profit-Loss Statement:
Comparative profit and loss statement is just like comparative balance sheet.
There are total $6$ columns. But the content of profit-loss statement and balance sheet are different.
The comparison of details of two years of two components of annual accounts profit-loss statement and balance sheet are done.
The growth of business entity can be seen through this analysis.
There are two important components of profit and loss statement:
Total revenue and total expenses. The results of earnings made during the year is available from the
profit-loss statement. The increase in revenue /decrease in expenses indicates the increase in revenue. The decrease in revenue and increase in expense indicates the decrease in revenue.
In short how much total revenue and total expenses have changed $($increase/ decrease$)$ in terms of rupees and percentage can be ascertained from comparative profit-loss statement.
$(b)$ Comparative Balance Sheet:
Comparative balance sheet has main two components: $(1)$ Equity and Liabilities and $(2)$ Assets
Balance sheet provides the information about the solvency status of the business enterprise. As compared to previous long term and short term solvency of the business current solvency increased or decreased can be known with the help of comparative balance sheet.
In short, during two periods how much $(i)$ share capital $(ii)$ Reserves and surplus $(iii)$ Non-current liabilities $(iv)$ Current liabilities as well as $(i)$ non-current assets $(11)$ current assets are changed in terms of rupee and percentage can be ascertained from comparative balance sheet. The trend of components of comparative balance sheet is fixed, flexible, decreasing or increasing etc. can be known through comparative balance sheet.
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