Financial Accounting solved MCQs

chapters
1 of 76

1. Partnership firm is constituted under the….

a. indian partnership act 1932

B. indian partnership act 1955

c. the association of persons act 1932

d. the indian association act 1955

2. The maximum number of Partners which can be allowed as partners in a firm are…

a. 40

B. 20

c. 25

d. 30

3. The limit on the number of partners is indirectly placed by…

a. the partnership act

B. the association of persons act

c. the companie\s act

d. the corporate associations act

4. In peicemeal distribution of cash, the first external liabilities to be paid are…

a. government dues

B. partners\ loans

c. preferential creditors

d. secured creditors

5. Pro-rata payment is applicable when the cash available for competing liabilities of the same class is..

a. insufficient

B. adequate

c. reserved

d. paid to partners

6. Purchase consideration can be calculated by…

a. market value method

B. book value method

c. net assets method

d. balance sheet method

7. ABC & Co. takes over the running business of PQR & Co. This is known as…

a. internal reconstruction

B. absorption

c. external reconstruction

d. pouncing

8. The Liability of the members of a limited company is…

a. unlimited

B. restricted

c. as per the articles of association

d. limited

9. Foreign Debtors appear at the year end on...

a. the balance sheet rate of exchange

B. fair value

c. original value

d. agreed value

10. Accounting Standard 11 (AS 11) is prescribed by the…

a. international financial reporting standards

B. the companies\ act

c. institute of chartered accountants of india

d. the government of india

11. 1. The underwriting commission in the case of debentures as per Companies Act, should not exceed_________

a. 2.5% of the price at which debenture are issued

B. 3% of the price at which the debentures are issued

c. 4% of the price at which debentures are issued

d. 5% of the price at which debentures are issued

12. The Buy Back of equity shares is governed by________________ of Companies Act

a. section 117 c

B. section 80

c. section 100 to 104

d. section 68

13. A feature which is common in all cases or merger__________________-

a. liquidation of at least two companies

B. liquidation at least one existing company & formation of another company

c. formation of at least one new company

d. purchase of one comapany by another company

14. Changes in the rate of Preference dividend payable in future without any change in the amount of capital is known as ___

a. reduction of share capital

B. variation of shareholders rights

c. alteration of share capital

d. compromise/ arrangement

15. In the case of members voluntary winding up liquidator is appointed by _____________

a. the registrar of companies

B. the central government

c. the company in general meeting

d. the board of directors

16. R LTD. Issued a debenture of Rs.100 each at Rs.90. The underwriting commission will be paid on___________

a. rs.95

B. rs.90

c. rs.105

d. rs.100

17. Buy Back refers to______________

a. refund of debentures

B. refund of preference share capital

c. refund of equity share capital

d. purchase of own debenture

18. Accounting for Absorption is governed by______________

a. as 1

B. as 13

c. as 11

d. as 14

19. Equity Shareholders giving up their claim to the reserves & accumulated profit amounts to______________

a. reduction of share capital

B. alteration of share capital

c. compromise/ arrangement

d. variation of shareholders rights

20. Amount of retirement benefits of employees exceeding Rs.20,000 per employees is treated as____________

a. secured creditors

B. unsecured creditors

c. over-riding preferential creditors

d. preferential creditors

21. M LTD. Issued share at a face value of Rs. 100 with a premium of Rs.20 per share. The underwrting commission will be calculated on __________

a. rs.120

B. rs.90

c. rs.100

d. rs.80

22. Buy Back must be completed within_______________

a. 3 months

B. 6 months

c. 2 months

d. 12 months

23. According to AS 14, Transferor company means the company__________

a. into which a company is amalgamated

B. which is amalgamated into another company

c. which is newly formed

d. which is any one old company into new comapny

24. In Interanl Reconstruction____________________

a. only on company goes into liquidation

B. no company is liquidated

c. one or more companies go into liquidation

d. two or more companies are liquidated

25. Accrued Holiday remuneration becoming payable to any workman is treated as ________________________

a. unsecured creditors

B. preferential creditors

c. over-riding preferential creditors

d. secured creditors

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