McqMate
Chapters
| 301. |
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 | |
| 302. |
------ 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 | |
| 303. |
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 | |
| 304. |
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 | |
| 305. |
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 | |
| 306. |
------ 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 | |
| 307. |
Right shares are issued to ------ |
| A. | directors |
| B. | promoters |
| C. | existing share holders |
| D. | debenture holders |
| Answer» C. existing share holders | |
| 308. |
Shares which carry preferential rights are called ------ |
| A. | equity shares |
| B. | preference shares |
| C. | sweaty equity |
| D. | green shoe |
| Answer» B. preference shares | |
| 309. |
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 | |
| 310. |
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 | |
| 311. |
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 | |
| 312. |
At present, a company limited by shares cannot issue …..preference shares |
| A. | redeemable |
| B. | irredeemable |
| C. | convertible |
| D. | none of these |
| Answer» B. irredeemable | |
| 313. |
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 | |
| 314. |
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 | |
| 315. |
------- profit means profit which would otherwise be available for distribution of dividend. |
| A. | capital |
| B. | gross |
| C. | net |
| D. | divisible |
| Answer» D. divisible | |
| 316. |
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 | |
| 317. |
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 | |
| 318. |
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 | |
| 319. |
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% | |
| 320. |
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 | |
| 321. |
Debenture represents ….of the company |
| A. | deposit |
| B. | overdraft |
| C. | loan |
| D. | none of these |
| Answer» C. loan | |
| 322. |
Debenture holders are ….of the company |
| A. | owners |
| B. | creditors |
| C. | both |
| D. | none of these |
| Answer» B. creditors | |
| 323. |
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 | |
| 324. |
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 | |
| 325. |
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 | |
| 326. |
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 | |
| 327. |
Premium on issue of debentures is a…. |
| A. | capital loss |
| B. | capital profit |
| C. | revenue profit |
| D. | revenue loss |
| Answer» B. capital profit | |
| 328. |
------ is a document which either creates or acknowledges a debt. |
| A. | debenture |
| B. | trust deed |
| C. | security |
| D. | Articles of Association |
| Answer» A. debenture | |
| 329. |
-------- debentures are secured by a charge on the assets of the company. |
| A. | naked |
| B. | simple |
| C. | unsecured |
| D. | mortgage |
| Answer» D. mortgage | |
| 330. |
-------- 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 | |
| 331. |
Companies may issue debentures as security against loans taken from banks/financial institutions. |
| A. | principal |
| B. | primary |
| C. | collateral |
| D. | chargeable |
| Answer» C. collateral | |
| 332. |
Discount on issue of debentures is a --------- |
| A. | capital loss |
| B. | capital profit |
| C. | revenue loss |
| D. | revenue profit |
| Answer» A. capital loss | |
| 333. |
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 | |
| 334. |
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 | |
| 335. |
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 | |
| 336. |
Dividend is paid on …..capital |
| A. | called |
| B. | paid up |
| C. | issued |
| D. | none of these |
| Answer» B. paid up | |
| 337. |
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 | |
| 338. |
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 | |
| 339. |
The amount set aside to meet the loss of bad debt is… |
| A. | Liability |
| B. | reserve |
| C. | provision |
| D. | contingent liability |
| Answer» C. provision | |
| 340. |
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 | |
| 341. |
Advance payment of tax is a…. |
| A. | Prepaid expense |
| B. | general reserve |
| C. | interim dividend |
| D. | provision for taxation |
| Answer» A. Prepaid expense | |
| 342. |
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% | |
| 343. |
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 | |
| 344. |
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 | |
| 345. |
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 | |
| 346. |
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 | |
| 347. |
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 | |
| 348. |
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 | |
| 349. |
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 | |
| 350. |
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 | |
| 351. |
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 | |
| 352. |
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 | |
| 353. |
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 | |
| 354. |
Pooling of interest method is applicable for amalgamation in the nature of…. |
| A. | merger |
| B. | consolidation |
| C. | reconstruction |
| D. | realization |
| Answer» A. merger | |
| 355. |
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% | |
| 356. |
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 | |
| 357. |
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 | |
| 358. |
Accounting for amalgamation is given in…. |
| A. | AS 14 |
| B. | AS 16 |
| C. | AS 20 |
| D. | None of these |
| Answer» A. AS 14 | |
| 359. |
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 | |
| 360. |
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 | |
| 361. |
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 | |
| 362. |
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 | |
| 363. |
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 | |
| 364. |
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 | |
| 365. |
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 | |
| 366. |
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 | |
| 367. |
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 | |
| 368. |
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 | |
| 369. |
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 | |
| 370. |
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 | |
| 371. |
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 | |
| 372. |
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 | |
| 373. |
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 | |
| 374. |
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 | |
| 375. |
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 | |
| 376. |
The amount of surrendered shares is credited to … |
| A. | CRR |
| B. | sinking fund |
| C. | capital reduction account |
| D. | reserve |
| Answer» C. capital reduction account | |
| 377. |
Amount sacrificed by shareholders are credited to …. |
| A. | capital reserve |
| B. | general reserve |
| C. | capital reduction |
| D. | none of these |
| Answer» C. capital reduction | |
| 378. |
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 | |
| 379. |
Any increase in the value of assets is…. to capital reduction |
| A. | debited |
| B. | credited |
| C. | Ignored |
| D. | None of these |
| Answer» B. credited | |
| 380. |
--------- 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 | |
| 381. |
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 | |
| 382. |
Which of the following does not involve liquidation of any company? |
| A. | internal reconstruction |
| B. | amalgamation |
| C. | absorption |
| D. | external reconstruction |
| Answer» A. internal reconstruction | |
| 383. |
Under which of the following circumstances can a company resort to internal reconstruction? |
| A. | accumulated huge losses |
| B. | shortage of capital |
| C. | over valued assets |
| D. | all of these |
| Answer» D. all of these | |
| 384. |
The balance in capital reduction a/c after writing off all accumulated loss, fictitious assets and overvalued assets are transferred to ------------- |
| A. | capital reserve |
| B. | general reserve |
| C. | reserve capital |
| D. | good will |
| Answer» A. capital reserve | |
| 385. |
Which of the following result in reduction of capital? |
| A. | Reducing share capital |
| B. | reducing the amount payable to creditors |
| C. | appreciation in the value of assets |
| D. | all of these |
| Answer» D. all of these | |
| 386. |
Which of the following is not an alteration of capital? |
| A. | consolidation of shares |
| B. | sub- division of shares |
| C. | conversion of shares in to stock |
| D. | paid off paid up capital in excess of needs of the company. |
| Answer» D. paid off paid up capital in excess of needs of the company. | |
| 387. |
Internal reconstruction can be done by ---------- |
| A. | Alteration of share capital |
| B. | reduction of share capital |
| C. | issue of share capital |
| D. | all of these |
| Answer» D. all of these | |
| 388. |
Which of the following is not a case of combination? |
| A. | external reconstruction |
| B. | internal reconstruction |
| C. | amalgamation |
| D. | absorption |
| Answer» B. internal reconstruction | |
| 389. |
The term banking is defined in section …. |
| A. | section 5 of banking regulation Act |
| B. | section 4 |
| C. | section 7 |
| D. | none of these |
| Answer» A. section 5 of banking regulation Act | |
| 390. |
A bank can open a branch only at the permission of the… |
| A. | SBI |
| B. | RBI |
| C. | Government. |
| D. | none of these |
| Answer» B. RBI | |
| 391. |
Schedule 16 relates to…. |
| A. | interest earned |
| B. | interest expended |
| C. | operating expenses |
| D. | none of these |
| Answer» C. operating expenses | |
| 392. |
Schedule 9 relates to…. |
| A. | fixed assets |
| B. | borrowings |
| C. | advances |
| D. | capital |
| Answer» C. advances | |
| 393. |
Banks are required to transfer ….. of their profits to statutory reserve |
| A. | 20% |
| B. | 25% |
| C. | 10% |
| D. | none of these |
| Answer» B. 25% | |
| 394. |
Assets acquired by a bank in satisfaction of a claim are known as… |
| A. | non-banking assets |
| B. | performing assets |
| C. | standard assets |
| D. | none of these |
| Answer» A. non-banking assets | |
| 395. |
Assets which do not carry more than normal credit risk is known as…. |
| A. | loss asset |
| B. | risk asset |
| C. | standard asset |
| D. | none of these |
| Answer» C. standard asset | |
| 396. |
On standard asset a minimum provision of….is required |
| A. | .25% |
| B. | .10% |
| C. | .40% |
| D. | none of these |
| Answer» C. .40% | |
| 397. |
------ represents that part of discount received during the year by a bank which relates to the next accounting year. |
| A. | trade discount |
| B. | normal discount |
| C. | unexpired discount |
| D. | cash discount |
| Answer» C. unexpired discount | |
| 398. |
A scheduled bank is required to maintain with RBI --------- at a prescribed percentage of their total time and demand deposit. |
| A. | SLR |
| B. | CRR |
| C. | statutory reserve |
| D. | branch adjustment |
| Answer» B. CRR | |
| 399. |
Every bank is required to maintain ----- with RBI in the form of cash, gold and securities an amount not less than 25% of their demand and time liabilities. |
| A. | CRR |
| B. | SLR |
| C. | statutory reserve |
| D. | branch adjustment |
| Answer» B. SLR | |
| 400. |
Which of the following is not an advance given by a bank? |
| A. | loan |
| B. | overdraft |
| C. | deposit |
| D. | cash credit |
| Answer» C. deposit | |
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