McqMate
Chapters
| 301. |
Interest on debenture is |
| A. | Adjustment of profit |
| B. | appropriation of profit |
| C. | charge on profit |
| D. | none of these |
| Answer» C. charge on profit | |
| 302. |
In the balance sheet of a company, debentures are shown under which heading |
| A. | Secured loan |
| B. | unsecured loan |
| C. | provisions |
| D. | reserves and surplus |
| Answer» A. Secured loan | |
| 303. |
In the balance sheet of a company , the discount on issue of debentures is shown under which heading |
| A. | Fixed asset |
| B. | current asset |
| C. | investment |
| D. | miscellaneous expenditure |
| Answer» D. miscellaneous expenditure | |
| 304. |
Advance payment of tax is in the nature of |
| A. | Capital expenditure |
| B. | prepaid expenses |
| C. | outstanding expenses |
| D. | revenue expenditure |
| Answer» B. prepaid expenses | |
| 305. |
Debentures are shown in the balance sheet under head |
| A. | Current asset loans and advances |
| B. | investments |
| C. | secured loan |
| D. | unsecured loan |
| Answer» C. secured loan | |
| 306. |
Preliminary expense Is an example of |
| A. | Fixed asset |
| B. | current asset |
| C. | investment |
| D. | fictitious asset |
| Answer» D. fictitious asset | |
| 307. |
Divisible profit do not include |
| A. | Insurance fund |
| B. | reserve fund |
| C. | profit and loss account balance |
| D. | revaluation |
| Answer» D. revaluation | |
| 308. |
The transfer of profit to reserve should not exceed |
| A. | 5% of profit |
| B. | 10% of profit |
| C. | 15% of profit |
| D. | 20% of profit |
| Answer» B. 10% of profit | |
| 309. |
Loose tools are shown in the balance sheet under |
| A. | Fixed asset |
| B. | investment |
| C. | current asset |
| D. | miscellaneous expenditure |
| Answer» C. current asset | |
| 310. |
Discount on shares and debentures are shown in |
| A. | P/L Appropriation a/c |
| B. | asset side of the b/s |
| C. | liability side of the b/s |
| D. | none of these. |
| Answer» B. asset side of the b/s | |
| 311. |
Calls in arrear Is |
| A. | Shown as current asset |
| B. | deducted from share capital |
| C. | shown as current liability |
| D. | shown under miscellaneous expenditure |
| Answer» B. deducted from share capital | |
| 312. |
The amount set aside to meet the loss of bad debt is |
| A. | Provision |
| B. | liability |
| C. | reserve |
| D. | contingent liability |
| Answer» A. Provision | |
| 313. |
When the proposed dividend exceeds 20% of the paid up capital, percentage of profit to be transferred to reserve is |
| A. | 10% |
| B. | 7.5% |
| C. | 2.5% |
| D. | 5% |
| Answer» A. 10% | |
| 314. |
In the case of joint stock company, goodwill is sown on the asset side under the head |
| A. | Fixed asset |
| B. | investment |
| C. | current asset |
| D. | miscellaneous expenditure |
| Answer» A. Fixed asset | |
| 315. |
Advance payment of tax should be shown on the |
| A. | Debit side of P/L a/c |
| B. | debit side of P/L appropriation a/c |
| C. | asset side of the B/S |
| D. | liability side of the B/S |
| Answer» C. asset side of the B/S | |
| 316. |
Which of the following items will be taken in the P/L a/c below the line |
| A. | Provision for taxation |
| B. | transfer to sinking fund |
| C. | contribution to PF |
| D. | preliminary expenses written off |
| Answer» C. contribution to PF | |
| 317. |
Scrip dividend means |
| A. | Unclaimed dividend |
| B. | arrears of dividend |
| C. | dividend paid other than cash |
| D. | cash dividend |
| Answer» C. dividend paid other than cash | |
| 318. |
Which of the following would not appear in a limited company’s appropriation a/c |
| A. | Transfer to revaluation reserve |
| B. | proposed taxation |
| C. | interim dividend |
| D. | transfer to general reserve. |
| Answer» B. proposed taxation | |
| 319. |
As per the rules framed under the companies Act, 1956, if the dividend proposed by a company is 12% of the paid up capital, the amount to be transferred to reserve must not be less than |
| A. | 5% of current year profit |
| B. | 7.5% of the current year profit |
| C. | 10% of the current year profit |
| D. | 2.5% of the current year profit. |
| Answer» D. 2.5% of the current year profit. | |
| 320. |
Banks show the provision for income tax under the head |
| A. | Contingent assets |
| B. | contingent liabilities |
| C. | other liabilities and provisions |
| D. | borrowings. |
| Answer» C. other liabilities and provisions | |
| 321. |
Rebate on bills discounted is |
| A. | An item of income |
| B. | a liability |
| C. | income received in advance |
| D. | accrued income. |
| Answer» C. income received in advance | |
| 322. |
Which of the following does not include under the head “other asset” |
| A. | Silver |
| B. | interest accrued |
| C. | gold |
| D. | inter office adjustment |
| Answer» C. gold | |
| 323. |
A non banking asset is |
| A. | An item of office equipment |
| B. | any asset required from the debtors in satisfaction of claim |
| C. | money at call and short notice |
| D. | furniture and fixtures |
| Answer» B. any asset required from the debtors in satisfaction of claim | |
| 324. |
In a bank balance sheet, unclaimed dividend will be shown under the head |
| A. | Contingent liabilities |
| B. | other liabilities |
| C. | borrowings |
| D. | none of these. |
| Answer» B. other liabilities | |
| 325. |
With effect from 31/03/2005, a doubt full asset is none which has remained in the substandard category for |
| A. | 18 month |
| B. | 12 month |
| C. | 6 month |
| D. | none of these |
| Answer» B. 12 month | |
| 326. |
Provision created for substandard is |
| A. | 10% |
| B. | 155 |
| C. | 20% |
| D. | none of these. |
| Answer» A. 10% | |
| 327. |
Provision created for unsecured doubtful debt is |
| A. | 50% |
| B. | 75% |
| C. | 100% |
| D. | none of these. |
| Answer» C. 100% | |
| 328. |
General insurance policies are taken |
| A. | One year |
| B. | two year |
| C. | three year |
| D. | none of these |
| Answer» A. One year | |
| 329. |
When policy matures on the death of the insured, it is expressed as |
| A. | With profit policy |
| B. | without profit policy |
| C. | whole life policy |
| D. | none of these |
| Answer» A. With profit policy | |
| 330. |
In the revenue account bonus in reduction of premium is shown as |
| A. | Liability |
| B. | income |
| C. | expense |
| D. | none of these |
| Answer» C. expense | |
| 331. |
The fixed assets of an insurance company are shown in |
| A. | Schedule 6 |
| B. | schedule 7 |
| C. | schedule 8 |
| D. | none of these |
| Answer» D. none of these | |
| 332. |
Insurance regulation and development authorities act came into effect in |
| A. | 1938 |
| B. | 1999 |
| C. | 2000 |
| D. | none of these |
| Answer» A. 1938 | |
| 333. |
Which of the following of an insurance company does not fall under income from investment |
| A. | Interest and dividends |
| B. | profit on sale of investment |
| C. | share transfer fee |
| D. | none of these. |
| Answer» C. share transfer fee | |
| 334. |
Which of the following of an insurance company is included in other assets |
| A. | Loan to directors |
| B. | agents balance |
| C. | advance tax paid |
| D. | none of these |
| Answer» B. agents balance | |
| 335. |
Reserve for unexpired risk is shown under |
| A. | Reserve and surplus |
| B. | current liabilities |
| C. | provision |
| D. | none of these. |
| Answer» C. provision | |
| 336. |
Which of the following is not an advantage of having a conceptual framework of accounting ? |
| A. | Development of accounting standards is subject less political pressure |
| B. | A consistent balance sheet or income statement approach is used to setting standards |
| C. | Considers the needs of all user |
| D. | Avoids a mixed up approach to setting standards |
| Answer» C. Considers the needs of all user | |
| 337. |
A conceptual framework for accounting is … |
| A. | A set of financial statements |
| B. | A set of rules governing financial reporting |
| C. | A set of components of financial statements |
| D. | A set of principles underpinning financial reporting |
| Answer» D. A set of principles underpinning financial reporting | |
| 338. |
Which of the following relate to financial position in a set of financial statements? |
| A. | Assets , liabilities, income and expense |
| B. | Assets, liabilities, income and equity |
| C. | Income and expense |
| D. | Income, expense and liabilities |
| Answer» B. Assets, liabilities, income and equity | |
| 339. |
GAAP stands for |
| A. | Generally accepted accounting principles |
| B. | Globally accepted accounting practices |
| C. | Generally allowable accounting principles |
| D. | Generally allowable accounting practices |
| Answer» A. Generally accepted accounting principles | |
| 340. |
The global key professional accounting body is ----- |
| A. | Internal accounting standards board |
| B. | The institute of chartered accountants of india |
| C. | The financial accounting standards board |
| D. | The international accounting standards committee |
| Answer» A. Internal accounting standards board | |
| 341. |
The original cost at which an asset or liability is acquired is known as -------- |
| A. | Amortization |
| B. | Replacement |
| C. | Historical cost |
| D. | Carrying cost |
| Answer» C. Historical cost | |
| 342. |
The international accounting standards committee was set up in ------------- |
| A. | 1982 |
| B. | 1976 |
| C. | 1967 |
| D. | 2009 |
| Answer» C. 1967 | |
| 343. |
The process of converting foreign – subsidiary financial statements into the home currency is known as------------ |
| A. | Transmission |
| B. | Translation |
| C. | Consolidation |
| D. | Reconstruction |
| Answer» B. Translation | |
| 344. |
……………… is an artificial person created by law |
| A. | Firm |
| B. | Sole trader |
| C. | Company |
| D. | None of these |
| Answer» C. Company | |
| 345. |
The liability of shareholders of a company is ……………….. |
| A. | Limited |
| B. | Unlimited |
| C. | Uncertain |
| D. | None of these |
| Answer» A. Limited | |
| 346. |
A company is managed by its……………. |
| A. | Partners |
| B. | Auditor |
| C. | Board of Directors |
| D. | Debenture holder |
| Answer» C. Board of Directors | |
| 347. |
. ………….company Is a company created by a special Act in Parliament |
| A. | Government |
| B. | Registered |
| C. | Chartered |
| D. | Statutory |
| Answer» D. Statutory | |
| 348. |
A company registered with Registrar of Companies under Indian Companies Act is called as……….. |
| A. | Government |
| B. | Registered |
| C. | Chartered |
| D. | Statutory |
| Answer» B. Registered | |
| 349. |
The company in which the liability of members is liable to pay the agreed amount at the time of winding up is called as ………….. |
| A. | Unlimited Company |
| B. | Company limited by shares |
| C. | Company limited by guarantee |
| D. | Liquidating Company |
| Answer» C. Company limited by guarantee | |
| 350. |
A company in which the transferability of share is restricted is called as ………….. |
| A. | Government Company |
| B. | Private Company |
| C. | Public Company |
| D. | Foreign Company |
| Answer» B. Private Company | |
| 351. |
. ……….is the first stage in the formation of a public company |
| A. | Promotion |
| B. | Incorporation |
| C. | Capital Subscription |
| D. | Commencement |
| Answer» A. Promotion | |
| 352. |
Authorised capital is called as…………… |
| A. | Reserve capital |
| B. | Nominal Capital |
| C. | Capital Reserve |
| D. | Subscribed capital |
| Answer» B. Nominal Capital | |
| 353. |
. …………..is that portion of capital which is called up only on winding up of the company. |
| A. | Authorised Capital |
| B. | Issued capital |
| C. | Subscribed capital |
| D. | Reserve capital |
| Answer» D. Reserve capital | |
| 354. |
In case of ……………..preference shares, the arrears of dividend are carried forward and paid out of the profits of the subsequent years. |
| A. | Participating |
| B. | Convertible |
| C. | Cumulative |
| D. | Redeemable |
| Answer» C. Cumulative | |
| 355. |
. …………..shares are repayable after the expiry of the fixed period or at the option of the company. |
| A. | Participating |
| B. | Convertible |
| C. | Cumulative |
| D. | Redeemable |
| Answer» D. Redeemable | |
| 356. |
A bundle of fully paid shares is called…………….. |
| A. | Stock |
| B. | Sweat Equity |
| C. | Warrant |
| D. | None of these |
| Answer» A. Stock | |
| 357. |
IPO stands for ……………… |
| A. | Initial Private Offer |
| B. | International Public Offer |
| C. | Initial Public Offer |
| D. | International Private Offer |
| Answer» C. Initial Public Offer | |
| 358. |
In …... the company offers the investors an opportunity to bid collectively. |
| A. | Private Placement |
| B. | Offer for sale |
| C. | Book building |
| D. | IPO |
| Answer» C. Book building | |
| 359. |
As per the companies Act, the interest on calls in advance is ………….. |
| A. | 10% |
| B. | 6% |
| C. | 5% |
| D. | 7% |
| Answer» B. 6% | |
| 360. |
The rate of interest on Calls in arrears as per Companies Act is ………… |
| A. | 10% |
| B. | 6% |
| C. | 5% |
| D. | 7% |
| Answer» C. 5% | |
| 361. |
The shares of a company can be issued at ………….. |
| A. | Par |
| B. | Premium |
| C. | Discount |
| D. | All of these |
| Answer» D. All of these | |
| 362. |
Share application account is a ……….. |
| A. | Real Account |
| B. | Nominal Account |
| C. | Impersonal Account. |
| D. | Personal Account |
| Answer» D. Personal Account | |
| 363. |
The rate of discount on shares cannot exceed ………. |
| A. | 10% |
| B. | 5% |
| C. | 6% |
| D. | 7% |
| Answer» A. 10% | |
| 364. |
A newly established company cannot issue shares at …… |
| A. | Par |
| B. | Premium |
| C. | Discount |
| D. | All of these |
| Answer» C. Discount | |
| 365. |
. ………..of total issued amount of capital is called minimum subscription. |
| A. | 75% |
| B. | 90% |
| C. | 95% |
| D. | 80% |
| Answer» B. 90% | |
| 366. |
The rate of discount should not exceed ……………. Of nominal vale of shares. |
| A. | 10% |
| B. | 5% |
| C. | 6% |
| D. | 7% |
| Answer» A. 10% | |
| 367. |
The minimum application money to be paid by an applicant must not be less than …… as per Companies Act. |
| A. | 10% |
| B. | 5% |
| C. | 15% |
| D. | 20% |
| Answer» B. 5% | |
| 368. |
The excess price received on the par value of shares should be credited to …………. |
| A. | Calls in advance A/c |
| B. | Reserve Capital A/c |
| C. | Security Premium A/c |
| D. | None of these |
| Answer» C. Security Premium A/c | |
| 369. |
The profit on reissue of forfeited shares is transferred to ……… |
| A. | General reserve |
| B. | Capital Redemption reserve |
| C. | Capital reserve |
| D. | Investment Allowance reserve |
| Answer» C. Capital reserve | |
| 370. |
Preference shareholders are………… |
| A. | Debtors of the company |
| B. | Creditors of the company |
| C. | Owners of the company |
| D. | None of these |
| Answer» B. Creditors of the company | |
| 371. |
The shares firstly offered to the existing shareholders are called as …………. |
| A. | Right shares |
| B. | Bonus shares |
| C. | Ordinary shares |
| D. | None of these |
| Answer» A. Right shares | |
| 372. |
The security premium account is shown in the balance sheet under the head………. |
| A. | Share capital |
| B. | Reserves & Surplus |
| C. | Secured loans |
| D. | Current liabilities |
| Answer» B. Reserves & Surplus | |
| 373. |
………..should be deducted from the share capital to determine the paid up capital. |
| A. | Security premium |
| B. | Calls in advance |
| C. | Calls in arrears |
| D. | Discount on issue |
| Answer» C. Calls in arrears | |
| 374. |
The share capital account is debited with …………while forfeiting shares |
| A. | Calls in arrears |
| B. | Paid up capital |
| C. | Called capital |
| D. | Issued capital |
| Answer» C. Called capital | |
| 375. |
On an equity share of Rs. 20, the company has called up Rs. 16 but Rs.14 has been received by the company, the share capital account should be credited by …… |
| A. | Rs. 20 |
| B. | Rs. 16 |
| C. | Rs. 14 |
| D. | Rs. 6 |
| Answer» B. Rs. 16 | |
| 376. |
Balance of forfeited share is ……. |
| A. | Revenue Reserve |
| B. | Capital Reserve |
| C. | Secret Reserve |
| D. | Security Premium |
| Answer» B. Capital Reserve | |
| 377. |
When shares are issued at a price higher than their face value, it is called issue at………….. |
| A. | Par |
| B. | Premium |
| C. | Discount |
| D. | None of these |
| Answer» B. Premium | |
| 378. |
The shares of a company only can be forfeited after giving a ………days notice |
| A. | 21 |
| B. | 14 |
| C. | 7 |
| D. | 30 |
| Answer» B. 14 | |
| 379. |
The forfeited shares can be reissued at ………… |
| A. | Par |
| B. | Premium |
| C. | Discount |
| D. | All of these |
| Answer» D. All of these | |
| 380. |
Preference shares cannot be redeemed at ……….. |
| A. | Par |
| B. | Premium |
| C. | Discount |
| D. | All of these |
| Answer» C. Discount | |
| 381. |
Which of the following is an example for capital profit? |
| A. | Capital Reserves |
| B. | Security premium |
| C. | Forfeited shares |
| D. | All of these. |
| Answer» D. All of these. | |
| 382. |
The allotment of shares in case of oversubscription is called….. |
| A. | Pro‐rata allotment |
| B. | Private Placement |
| C. | Offer for sale |
| D. | None of these |
| Answer» A. Pro‐rata allotment | |
| 383. |
Security premium account can be utilized for …………. |
| A. | Issuing fully paid bonus shares |
| B. | Write off preliminary expenses |
| C. | Write off underwriting commission |
| D. | All of these |
| Answer» D. All of these | |
| 384. |
. …………..is that portion of issued capital which is applied for by the public. |
| A. | Issued capital |
| B. | Subscribed capital |
| C. | Nominal Capital |
| D. | Paid up capital |
| Answer» B. Subscribed capital | |
| 385. |
. ……………is an instrument of acknowledgment of debt. |
| A. | Equity share |
| B. | Preference Share |
| C. | Debenture |
| D. | All of these |
| Answer» C. Debenture | |
| 386. |
Debenture represents ………. Of a company |
| A. | Borrowed capital |
| B. | Owned capital |
| C. | Hybrid capital |
| D. | None of these |
| Answer» A. Borrowed capital | |
| 387. |
Debenture holders will get …….. |
| A. | Dividend |
| B. | Interest |
| C. | Profit |
| D. | All of these |
| Answer» B. Interest | |
| 388. |
Debenture holders are the ……….of a company |
| A. | Debtors |
| B. | Owners |
| C. | Creditors |
| D. | Borrowers |
| Answer» C. Creditors | |
| 389. |
A charge created not on specific assets but generally on all assets is known as…………. |
| A. | Fixed charge |
| B. | Floating charge |
| C. | Mortgage |
| D. | None of these |
| Answer» B. Floating charge | |
| 390. |
. …………..debentures can be transferred only with the knowledge of the company. |
| A. | Naked |
| B. | Mortgage |
| C. | Registered |
| D. | Bearer |
| Answer» C. Registered | |
| 391. |
. ………..debentures are transferable by mere delivery |
| A. | Naked |
| B. | Mortgage |
| C. | Registered |
| D. | Bearer |
| Answer» D. Bearer | |
| 392. |
. …………debentures are secured by the assets of the company |
| A. | Naked |
| B. | Mortgage |
| C. | Registered |
| D. | Bearer |
| Answer» B. Mortgage | |
| 393. |
. Unsecured debentures are called as ……………….debentures |
| A. | Naked |
| B. | Mortgage |
| C. | Registered |
| D. | Bearer |
| Answer» A. Naked | |
| 394. |
FCD stands for …………… |
| A. | Fixed Charge Debentures |
| B. | Floating Charge Debentures |
| C. | Fully Convertible Debentures |
| D. | None of these |
| Answer» C. Fully Convertible Debentures | |
| 395. |
Discount or loss on issue of debenture is a …………. |
| A. | Capital Profit |
| B. | Revenue Receipt |
| C. | Capital Loss |
| D. | Revenue Expense |
| Answer» C. Capital Loss | |
| 396. |
Debentures can be redeemed out of ………. |
| A. | Fresh issue |
| B. | Capital |
| C. | Profit |
| D. | All of these |
| Answer» D. All of these | |
| 397. |
Interest on debenture is ………. |
| A. | Adjustment of profit |
| B. | Appropriation of Profit. |
| C. | Charge on profit |
| D. | None of these |
| Answer» C. Charge on profit | |
| 398. |
Debentures are shown in the balance sheet under the head ……….. |
| A. | Secured loans |
| B. | Unsecured loans |
| C. | Provisions |
| D. | Current liabilities |
| Answer» A. Secured loans | |
| 399. |
After realizing all the investments, the balance in the sinking fund account is transferred to ………… |
| A. | Profit and Loss A/c |
| B. | Debenture Account |
| C. | Sinking fund A/c |
| D. | Capital reserve |
| Answer» D. Capital reserve | |
| 400. |
When own debentures are cancelled, any profit on cancellation is transferred to …….. |
| A. | General Reserve |
| B. | Capital Reserve |
| C. | Profit and Loss A/c |
| D. | Debenture A/c |
| Answer» B. Capital Reserve | |
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