McqMate
Chapters
| 101. |
Sources of finance of the redemption of debentures are: |
| A. | redemption out of profits |
| B. | redemption out of capital |
| C. | the proceeds from fresh issue of shares/debentures |
| D. | all the above |
| Answer» D. all the above | |
| 102. |
Which of the following is not shown on the liability side of a balance sheet of a company |
| A. | authorized capital |
| B. | issued capital |
| C. | paid up capital |
| D. | reserve capital |
| Answer» D. reserve capital | |
| 103. |
Share application account is a…. |
| A. | nominal |
| B. | real |
| C. | personal |
| D. | none of these |
| Answer» C. personal | |
| 104. |
Penalty for delay in refunding application money |
| A. | 6% |
| B. | 5% |
| C. | 15% |
| D. | 20% |
| Answer» C. 15% | |
| 105. |
Conversion of physical shares in to electronic securities is called…. |
| A. | dematerialization |
| B. | price rigging |
| C. | re-materialization |
| D. | none of these |
| Answer» A. dematerialization | |
| 106. |
Public limited companies cannot issue …. |
| A. | equity shares |
| B. | deferred shares |
| C. | preference shares |
| D. | right shares |
| Answer» B. deferred shares | |
| 107. |
Preference shareholders are …. of the company |
| A. | creditors |
| B. | owners |
| C. | customers |
| D. | borrowers |
| Answer» B. owners | |
| 108. |
The minimum share application money is…. |
| A. | Re.1 /share |
| B. | 5% of the face value of share |
| C. | 10% of the issue price of share |
| D. | none of these |
| Answer» B. 5% of the face value of share | |
| 109. |
The difference between subscribed capital and called capital is known as….. |
| A. | calls in advance |
| B. | paid up capital |
| C. | uncalled capital |
| D. | calls in arrear |
| Answer» C. uncalled capital | |
| 110. |
The rate of discount on issue of shares should not exceed …. % of the nominal value of shares. |
| A. | 10 |
| B. | 2 |
| C. | 4 |
| D. | 5 |
| Answer» A. 10 | |
| 111. |
On calls in advance, interest is payable @ …. |
| A. | 5% |
| B. | 6% |
| C. | 4% |
| D. | Nil |
| Answer» B. 6% | |
| 112. |
Right shares are those shares which are issued to |
| A. | directors |
| B. | promoters |
| C. | existing shareholders |
| D. | none of these |
| Answer» C. existing shareholders | |
| 113. |
After completing ….years a company can issue shares at discount. |
| A. | 2 |
| B. | 3 |
| C. | 1 |
| D. | 4 |
| Answer» C. 1 | |
| 114. |
The profit on reissue of shares is transferred to …. |
| A. | general reserve |
| B. | capital reserve |
| C. | P/L Account |
| D. | P/L Appropriation account |
| Answer» B. capital reserve | |
| 115. |
Voluntary return of shares by shareholders to the company for cancellation is called |
| A. | transfer of shares |
| B. | forfeiture of shares |
| C. | surrender of shares |
| D. | buyback of shares |
| Answer» C. surrender of shares | |
| 116. |
The minimum amount of capital which must be subscribed by the public before allotment is called |
| A. | allotment money |
| B. | Minimum subscription |
| C. | subscribed capital |
| D. | None of these |
| Answer» B. Minimum subscription | |
| 117. |
Stock is a consolidation of …..Shares. |
| A. | partly paid shares |
| B. | fully paid shares. |
| C. | equity shares |
| D. | Sweat shares |
| Answer» B. fully paid shares. | |
| 118. |
That part of the capital which will be called up only in the event of winding up of the company is called ------- capital |
| A. | issued |
| B. | paid-up |
| C. | reserve |
| D. | uncalled |
| Answer» C. reserve | |
| 119. |
Preference share holders are entitled to a fixed rate of ------- |
| A. | interest |
| B. | dividend |
| C. | coupon |
| D. | capital |
| Answer» B. dividend | |
| 120. |
Those preference shares which do not carry the right of share in excess profits are known as ------- preference shares. |
| A. | irredeemable |
| B. | non-cumulative |
| C. | non -convertible |
| D. | non-participating |
| Answer» D. non-participating | |
| 121. |
------ is deducted from the called- up capital in order to calculate paid-up capital. |
| A. | calls in arrear |
| B. | calls in advance |
| C. | un called capital |
| D. | reserve capital |
| Answer» A. calls in arrear | |
| 122. |
Forfeiture of shares results in compulsory termination of ------ due to non payment of allotment/call money. |
| A. | allotment |
| B. | membership |
| C. | subscription |
| D. | issue |
| Answer» B. membership | |
| 123. |
On forfeiture of shares, which of the following account is credited with the amount of money already received on such shares? |
| A. | shares forfeited a/c |
| B. | share capital a/c |
| C. | unpaid calls a/c |
| D. | share premium a/c |
| Answer» A. shares forfeited a/c | |
| 124. |
The discount on re-issue of forfeited shares is debited to ---- a/c. |
| A. | share capital |
| B. | shares forfeited |
| C. | bank |
| D. | discount on issue of shares |
| Answer» B. shares forfeited | |
| 125. |
------ implies issue and allotment of shares to a selected group of persons and not to general public. |
| A. | initial public offer |
| B. | right issue |
| C. | private placement |
| D. | pre-emptive right |
| Answer» C. private placement | |
| 126. |
Right shares are issued to ------ |
| A. | directors |
| B. | promoters |
| C. | existing share holders |
| D. | debenture holders |
| Answer» C. existing share holders | |
| 127. |
Shares which carry preferential rights are called ------ |
| A. | equity shares |
| B. | preference shares |
| C. | sweaty equity |
| D. | green shoe |
| Answer» B. preference shares | |
| 128. |
A company cannot issue redeemable preference shares for a period exceeding ………. |
| A. | 6 years |
| B. | 7years |
| C. | 10 years |
| D. | 20 years |
| Answer» D. 20 years | |
| 129. |
Preference shares can be redeemed…. |
| A. | If they are fully paid up |
| B. | if they are partly paid up |
| C. | if they are convertible. |
| D. | None of these |
| Answer» A. If they are fully paid up | |
| 130. |
Premium on redemption of preference shares can be provided out of …. |
| A. | securities premium account |
| B. | capital reserve account |
| C. | general reserve account |
| D. | all of these |
| Answer» D. all of these | |
| 131. |
At present, a company limited by shares cannot issue …..preference shares |
| A. | redeemable |
| B. | irredeemable |
| C. | convertible |
| D. | none of these |
| Answer» B. irredeemable | |
| 132. |
Capital redemption reserve is created out of |
| A. | Dividend equalization fund |
| B. | P/L account |
| C. | General reserve account |
| D. | All of these |
| Answer» D. All of these | |
| 133. |
Capital redemption reserve can be utilized for… |
| A. | declaring dividend |
| B. | writing of capital losses |
| C. | issue of fully paid up bonus shares |
| D. | none of these |
| Answer» C. issue of fully paid up bonus shares | |
| 134. |
------- profit means profit which would otherwise be available for distribution of dividend. |
| A. | capital |
| B. | gross |
| C. | net |
| D. | divisible |
| Answer» D. divisible | |
| 135. |
Which of the following is not a source of redemption of preference shares? |
| A. | divisible profit |
| B. | securities premium a/c |
| C. | realization of asset |
| D. | proceeds of fresh issue |
| Answer» C. realization of asset | |
| 136. |
The nominal value of preference shares to be redeemed can be provided out of ------ |
| A. | general reserve |
| B. | capital reserve |
| C. | CRR |
| D. | securities premium |
| Answer» A. general reserve | |
| 137. |
Redemption of preference shares should not be regarded as reduction of ----- capital of the company. |
| A. | paid-up |
| B. | called-up |
| C. | subscribed |
| D. | authorized |
| Answer» D. authorized | |
| 138. |
Buyback of shares should not exceed ….percent of paid up capital and free reserve of the company. |
| A. | 50% |
| B. | 10% |
| C. | 5% |
| D. | 25% |
| Answer» D. 25% | |
| 139. |
Under the scheme of buyback of shares , the company in order to perform its obligations , is required to open an ….account |
| A. | fixed deposit |
| B. | escrow deposit |
| C. | savings deposit |
| D. | current deposit |
| Answer» B. escrow deposit | |
| 140. |
Debenture represents ….of the company |
| A. | deposit |
| B. | overdraft |
| C. | loan |
| D. | none of these |
| Answer» C. loan | |
| 141. |
Debenture holders are ….of the company |
| A. | owners |
| B. | creditors |
| C. | both |
| D. | none of these |
| Answer» B. creditors | |
| 142. |
Loss on issue or discount on issue of debenture is a…..asset |
| A. | tangible |
| B. | current |
| C. | fictitious |
| D. | none of these |
| Answer» C. fictitious | |
| 143. |
When debentures are redeemed out of profits, an amount equal is transferred to….. |
| A. | CRR |
| B. | capital reserve |
| C. | revenue reserve |
| D. | debenture redemption reserve |
| Answer» D. debenture redemption reserve | |
| 144. |
Profit on sale of sinking fund investment is credited to …. |
| A. | general reserve |
| B. | capital reserve |
| C. | sinking fund |
| D. | none of these |
| Answer» C. sinking fund | |
| 145. |
When own debentures are cancelled any profit on cancellation is transferred to … |
| A. | general reserve |
| B. | capital reserve |
| C. | P/L Account |
| D. | none of these |
| Answer» B. capital reserve | |
| 146. |
Premium on issue of debentures is a…. |
| A. | capital loss |
| B. | capital profit |
| C. | revenue profit |
| D. | revenue loss |
| Answer» B. capital profit | |
| 147. |
------ is a document which either creates or acknowledges a debt. |
| A. | debenture |
| B. | trust deed |
| C. | security |
| D. | Articles of Association |
| Answer» A. debenture | |
| 148. |
-------- debentures are secured by a charge on the assets of the company. |
| A. | naked |
| B. | simple |
| C. | unsecured |
| D. | mortgage |
| Answer» D. mortgage | |
| 149. |
-------- is a document prepared by the company before the issue of prospectus to the public for subscription of debentures. |
| A. | debenture |
| B. | trust deed |
| C. | abridged prospectus |
| D. | call letter |
| Answer» B. trust deed | |
| 150. |
Companies may issue debentures as security against loans taken from banks/financial institutions. |
| A. | principal |
| B. | primary |
| C. | collateral |
| D. | chargeable |
| Answer» C. collateral | |
| 151. |
Discount on issue of debentures is a --------- |
| A. | capital loss |
| B. | capital profit |
| C. | revenue loss |
| D. | revenue profit |
| Answer» A. capital loss | |
| 152. |
Which of the following is a method of redemption of debentures? |
| A. | draw of lots |
| B. | conversion |
| C. | open market purchase |
| D. | all of these |
| Answer» D. all of these | |
| 153. |
Interest on debenture is ----- |
| A. | An appropriation of profit |
| B. | a charge against profit |
| C. | an adjustment of profit |
| D. | none of these |
| Answer» B. a charge against profit | |
| 154. |
After the redemption of debentures, any credit balance in the Sinking Fund a/c is transferred to -------- a/c. |
| A. | general reserve |
| B. | capital reserve |
| C. | P&L |
| D. | none of these |
| Answer» A. general reserve | |
| 155. |
Dividend is paid on …..capital |
| A. | called |
| B. | paid up |
| C. | issued |
| D. | none of these |
| Answer» B. paid up | |
| 156. |
In the case of joint stock companies , the assets and liabilities in B/S are arranged in the order of … |
| A. | serial number |
| B. | performance |
| C. | availability |
| D. | none of these |
| Answer» B. performance | |
| 157. |
Dividend declared in between two annual general meeting is called…. |
| A. | unclaimed dividend |
| B. | interim dividend |
| C. | proposed dividend |
| D. | scrip dividend |
| Answer» B. interim dividend | |
| 158. |
The amount set aside to meet the loss of bad debt is… |
| A. | Liability |
| B. | reserve |
| C. | provision |
| D. | contingent liability |
| Answer» C. provision | |
| 159. |
Unclaimed dividend is shown in… |
| A. | P/L Account |
| B. | P/L Appropriation account |
| C. | Balance sheet |
| D. | None of these |
| Answer» C. Balance sheet | |
| 160. |
Advance payment of tax is a…. |
| A. | Prepaid expense |
| B. | general reserve |
| C. | interim dividend |
| D. | provision for taxation |
| Answer» A. Prepaid expense | |
| 161. |
When the proposed dividend exceeds 20% of paid up capital, percentage of profit transferred to general reserve is….. |
| A. | 2.5% |
| B. | 5% |
| C. | 7.5% |
| D. | 10% |
| Answer» D. 10% | |
| 162. |
Which of the following represents source of fund in the balance sheet of a company? |
| A. | secured loan |
| B. | share capital |
| C. | reserves & surplus |
| D. | all of these |
| Answer» D. all of these | |
| 163. |
Which of the following does not represent application of fund of a company? |
| A. | fixed asset |
| B. | good will |
| C. | debentures |
| D. | debtors |
| Answer» C. debentures | |
| 164. |
Which of the following reserves cannot be distributed as dividend to share holders? |
| A. | securities premium |
| B. | profit on forfeiture of shares |
| C. | profit on sale of fixed assets |
| D. | all of these |
| Answer» D. all of these | |
| 165. |
Which of the following reserve does not appear in the balance sheet of a company? |
| A. | secret reserve |
| B. | general reserve |
| C. | capital reserve |
| D. | specific reserve |
| Answer» A. secret reserve | |
| 166. |
Fictitious assets are shown on the asset side of the balance sheet of a company under the heading ----------- |
| A. | Fixed asset |
| B. | current asset |
| C. | foot note |
| D. | none |
| Answer» A. Fixed asset | |
| 167. |
Unclaimed dividend is shown on the liability side of the balance sheet of a company as -- ------- |
| A. | Share capital |
| B. | current liabilities |
| C. | Reserves & Surplus |
| D. | non- current liability |
| Answer» B. current liabilities | |
| 168. |
Dividend may be declared out of ---------------- |
| A. | Current profit |
| B. | past reserves |
| C. | money provided by government |
| D. | all of these |
| Answer» D. all of these | |
| 169. |
Financial statement in relation to a company includes: |
| A. | Balance sheet |
| B. | Statement of P&L |
| C. | Cash flow statement |
| D. | all of these |
| Answer» D. all of these | |
| 170. |
Which of the following is not a long term borrowing of a company? |
| A. | Debentures |
| B. | term loans |
| C. | loans repayable on demand from banks |
| D. | long- term finance lease obligations |
| Answer» C. loans repayable on demand from banks | |
| 171. |
Calls in advance is shown in the balance sheet as ------------- |
| A. | Current liabilities |
| B. | added to called-up capital |
| C. | current assets |
| D. | deduction from called -up capital |
| Answer» A. Current liabilities | |
| 172. |
The difference between gross dividend receivable and dividend received is debited to - -------- |
| A. | Interim dividend |
| B. | tax deducted at source |
| C. | net dividend |
| D. | difference adjustment |
| Answer» B. tax deducted at source | |
| 173. |
Pooling of interest method is applicable for amalgamation in the nature of…. |
| A. | merger |
| B. | consolidation |
| C. | reconstruction |
| D. | realization |
| Answer» A. merger | |
| 174. |
For amalgamation in the nature of merger, the shareholders holding at least or more of the equity shares of the transferor company becomes the equity shareholders of the transferee company. |
| A. | 90% |
| B. | 80% |
| C. | 100% |
| D. | none of these |
| Answer» A. 90% | |
| 175. |
Realization loss is transferred to ….. |
| A. | Preference shareholders a/c |
| B. | equity shareholders a/c |
| C. | creditors a/c |
| D. | none of these |
| Answer» B. equity shareholders a/c | |
| 176. |
When an existing company takes over the business of one or more existing companies, it is called…. |
| A. | amalgamation |
| B. | absorption |
| C. | internal reconstruction |
| D. | none of these |
| Answer» B. absorption | |
| 177. |
Accounting for amalgamation is given in…. |
| A. | AS 14 |
| B. | AS 16 |
| C. | AS 20 |
| D. | None of these |
| Answer» A. AS 14 | |
| 178. |
Liquidation expenses paid by the transferee company is debited to … |
| A. | General reserve account |
| B. | P/L Account |
| C. | goodwill account |
| D. | none of these |
| Answer» C. goodwill account | |
| 179. |
Which of the following fictitious assets is not taken over by the transferee company? |
| A. | Preliminary expenses |
| B. | underwriting commission |
| C. | discount on issue of shares |
| D. | all of these |
| Answer» D. all of these | |
| 180. |
Which of the following is considered as an asset while calculating purchase consideration? |
| A. | goodwill |
| B. | patent |
| C. | trade mark |
| D. | all of these |
| Answer» D. all of these | |
| 181. |
The accumulated losses and fictitious assets of the transferor company are transferred to -------- a/c. |
| A. | equity share holders |
| B. | transferee company |
| C. | equity capital |
| D. | realization |
| Answer» A. equity share holders | |
| 182. |
Which of the following a/c is debited when statutory reserve of the transferor company is taken over by the transferee company? |
| A. | goodwill a/c |
| B. | amalgamation adjustment a/c |
| C. | capital reserve a/c |
| D. | statutory reserve |
| Answer» B. amalgamation adjustment a/c | |
| 183. |
Under purchase method of amalgamation, --------- of the transferor company continues to appear in the balance sheet of the transferee company. |
| A. | capital reserve |
| B. | general reserve |
| C. | statutory reserve |
| D. | specific reserve |
| Answer» C. statutory reserve | |
| 184. |
While preparing the transferee company’s financial statement under amalgamation in the nature of merger, the assets and liabilities taken over from the transferor company should be incorporated at ---------- |
| A. | cost |
| B. | book value |
| C. | revised value |
| D. | none |
| Answer» B. book value | |
| 185. |
While preparing the transferee company’s financial statement under amalgamation in the nature of purchase, the assets and liabilities taken over from the transferor company should be incorporated at -------- |
| A. | Cost |
| B. | book value |
| C. | revised value |
| D. | none |
| Answer» C. revised value | |
| 186. |
Which of the following should not be considered as a part of purchase consideration? |
| A. | Payment to equity share holders |
| B. | payment to preference share holders |
| C. | payment to debenture holders |
| D. | cash payment to share holders |
| Answer» C. payment to debenture holders | |
| 187. |
Which of the following is considered while calculating purchase consideration under Net asset method? |
| A. | Assets taken over |
| B. | liabilities taken over |
| C. | good will taken over |
| D. | all of the above |
| Answer» D. all of the above | |
| 188. |
Under net payment method, purchase consideration includes all payments made to the share holders in the form of --------- |
| A. | Equity share |
| B. | preference share |
| C. | cash |
| D. | all of these |
| Answer» D. all of these | |
| 189. |
Which of the following is a statutory reserve? |
| A. | Development Allowance Reserve |
| B. | Capital Reserve |
| C. | Workmen’s Compensation Fund |
| D. | CRR |
| Answer» A. Development Allowance Reserve | |
| 190. |
Any excess amount paid to preference share holders is debited to ------ --- account |
| A. | realisation |
| B. | preference share holders |
| C. | P&L |
| D. | preference share capital |
| Answer» A. realisation | |
| 191. |
While preparing the books of the transferee company in purchase method, the difference between purchase consideration and share capital of the transferor company should be adjusted in ------------- |
| A. | Share capital |
| B. | reserves |
| C. | assets |
| D. | liabilities |
| Answer» B. reserves | |
| 192. |
The excess of purchase consideration over net assets of the transferor company acquired by the transferee company should be recognized as -------- in purchase method |
| A. | Capital reserve |
| B. | general reserve |
| C. | good will |
| D. | P&L |
| Answer» C. good will | |
| 193. |
In purchase method, the excess of net asset of the transferor company acquired by the transferee company over the purchase consideration should be recognized as ------------ |
| A. | P&L |
| B. | good will |
| C. | general reserve |
| D. | capital reserve |
| Answer» D. capital reserve | |
| 194. |
Alteration of shares of smaller amounts into shares of larger amount is called…..of share capital |
| A. | surrender |
| B. | subdivision |
| C. | consolidation |
| D. | none of these |
| Answer» C. consolidation | |
| 195. |
The amount of surrendered shares is credited to … |
| A. | CRR |
| B. | sinking fund |
| C. | capital reduction account |
| D. | reserve |
| Answer» C. capital reduction account | |
| 196. |
Amount sacrificed by shareholders are credited to …. |
| A. | capital reserve |
| B. | general reserve |
| C. | capital reduction |
| D. | none of these |
| Answer» C. capital reduction | |
| 197. |
Capital reduction account is used to … |
| A. | write off losses |
| B. | transfer to capital |
| C. | issue bonus shares |
| D. | none of these |
| Answer» A. write off losses | |
| 198. |
Any increase in the value of assets is…. to capital reduction |
| A. | debited |
| B. | credited |
| C. | Ignored |
| D. | None of these |
| Answer» B. credited | |
| 199. |
--------- is the account created in connection with internal reconstruction. |
| A. | realization a/c |
| B. | capital reduction a/c |
| C. | adjustment a/c |
| D. | CRR a/c |
| Answer» B. capital reduction a/c | |
| 200. |
Alteration of shares of larger denominations into smaller denominations is called -------- of shares. |
| A. | consolidation |
| B. | surrender |
| C. | sub-division |
| D. | valuation |
| Answer» C. sub-division | |
Done Reading?