McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Bachelor of Commerce (B Com) .
Chapters
| 251. |
Which of the following cannot be used for the purpose of creation of capital redemption reserve account? |
| A. | profit and loss account (credit balance) |
| B. | general reserve account |
| C. | dividend equalization reserve account |
| D. | unclaimed dividends account |
| Answer» D. unclaimed dividends account | |
| 252. |
The Capital Redemption reserve is created for the following reasons: |
| A. | to maintain the capital intact |
| B. | to safeguard the interest company’s creditors |
| C. | both of the above |
| D. | none of the above |
| Answer» C. both of the above | |
| 253. |
Which of the following accounts can be transferred to capital redemption reserve account? |
| A. | general reserve account |
| B. | forfeited shares account |
| C. | profit prior to incorporation |
| D. | securities premium account |
| Answer» A. general reserve account | |
| 254. |
The technique of converting figures into percentage in some common base is called _____. |
| A. | ratio analysis |
| B. | common size statement analysis |
| C. | trend percentages |
| D. | none of these |
| Answer» A. ratio analysis | |
| 255. |
The ratio which depicts the relationship between two items, one of which is drawn from the Balance Sheet and the other from the revenue account |
| A. | current ratio |
| B. | equity ratio |
| C. | net profit ratio |
| D. | debtors turnover ratio |
| Answer» D. debtors turnover ratio | |
| 256. |
The ratio of liquid asset to current liabilities |
| A. | quick ratio |
| B. | current ratio |
| C. | absolute liquid ratio |
| D. | combined ratio |
| Answer» A. quick ratio | |
| 257. |
The ratio which shows the relationship b/w shareholder’s fund and total assets |
| A. | debit equity ratio |
| B. | proprietary ratio |
| C. | solvency ratio |
| D. | fixed asset |
| Answer» B. proprietary ratio | |
| 258. |
Long term solvency of a firm can be measured by |
| A. | current ratio |
| B. | net profit ratio |
| C. | gross profit ratio |
| D. | debt equity ratio |
| Answer» D. debt equity ratio | |
| 259. |
The ratio that shows the relationship between fixed asset to shareholders fund |
| A. | fixed asset to net worth |
| B. | fixed asset ratio |
| C. | fixed assets turnover ratio |
| D. | net worth ratio |
| Answer» A. fixed asset to net worth | |
| 260. |
The index of efficiency and profitability of the business |
| A. | operating ratio |
| B. | operating profit ratio |
| C. | expense ratio |
| D. | net profit ratio |
| Answer» D. net profit ratio | |
| 261. |
The ratio that includes whether investment in inventory is efficiently used or not |
| A. | inventory turnover ratio |
| B. | working capital turnover ratio |
| C. | fixed asset turnover ratio |
| D. | activity ratio |
| Answer» A. inventory turnover ratio | |
| 262. |
The main aim of the ratio analysis is to help the ______ of the firm |
| A. | owners |
| B. | officials |
| C. | departments |
| D. | management |
| Answer» D. management | |
| 263. |
Ratios indicate trends in important items and this helps in _________ |
| A. | forecasting |
| B. | reporting |
| C. | analyzing |
| D. | interpreting |
| Answer» A. forecasting | |
| 264. |
Ratios help the management in evolving market strategies through ________ |
| A. | inter firm comparison |
| B. | intra firm comparison |
| C. | ratios |
| D. | none of the above |
| Answer» A. inter firm comparison | |
| 265. |
Ratios may be used as a measure of ________ |
| A. | efficiency |
| B. | solvency |
| C. | profitability |
| D. | none of the above |
| Answer» A. efficiency | |
| 266. |
An example of Balance Sheet ratio is _______ |
| A. | net profit ratio |
| B. | inventory turnover ratio |
| C. | current ratio |
| D. | fixed asset turnover ratio |
| Answer» C. current ratio | |
| 267. |
Income statement ratios are also called |
| A. | operating ratio |
| B. | liquidity ratio |
| C. | activity ratio |
| D. | trend ratio |
| Answer» A. operating ratio | |
| 268. |
Leverage ratios are also known as _______ ratios |
| A. | short term solvency ratios |
| B. | long term solvency ratios |
| C. | solvency ratio |
| D. | liquidity ratio |
| Answer» B. long term solvency ratios | |
| 269. |
The ratios that shows the capacity of the business unit to meet its short term obligation out of its short term resources is known as ______ |
| A. | solvency ratio |
| B. | leverage ratio |
| C. | liquidity ratio |
| D. | trend ratio |
| Answer» C. liquidity ratio | |
| 270. |
The ratio that highlight the end result of business activities are known as ________ ratios |
| A. | liquidity |
| B. | leverage |
| C. | activity |
| D. | profitability |
| Answer» D. profitability | |
| 271. |
The ideal current ratio is |
| A. | 2:1 |
| B. | 1:1 |
| C. | 1:2 |
| D. | 1:3 |
| Answer» A. 2:1 | |
| 272. |
In a sound business, acid test ratio ________ is considered satisfactory |
| A. | 1:2 |
| B. | 2:1 |
| C. | 1:1 |
| D. | 0.5:1 |
| Answer» C. 1:1 | |
| 273. |
Satisfactory level of debt equity ratio is _________. |
| A. | 1:1 |
| B. | 3:1 |
| C. | 2:1 |
| D. | 1:2 |
| Answer» C. 2:1 | |
| 274. |
The ratio which indicates how quickly debtors are converted into cash is ________. |
| A. | receivable turnover ratio |
| B. | inventory turnover ratio |
| C. | working capital turnover ratio |
| D. | creditors turnover ratio |
| Answer» A. receivable turnover ratio | |
| 275. |
Net capital employed is equal to ______. |
| A. | total assets minus liabilities |
| B. | fixed asset plus net working capital |
| C. | total asset minus long-term liabilities |
| D. | total assets |
| Answer» B. fixed asset plus net working capital | |
| 276. |
Lower stock turnover ratio indicates ________. |
| A. | solvency position |
| B. | monopoly situation |
| C. | over investment in inventory |
| D. | none of these |
| Answer» C. over investment in inventory | |
| 277. |
Market price per share divided by earnings per share is ________. |
| A. | price earning ratio |
| B. | return on equity |
| C. | market test ratio |
| D. | book value per share |
| Answer» A. price earning ratio | |
| 278. |
When all debentures are redeemed, balance in the Debenture Redemption Fund Account is transferred to: |
| A. | capital reserve |
| B. | general reserve |
| C. | profit & loss appropriation a/c |
| D. | none of these |
| Answer» B. general reserve | |
| 279. |
According to SEBI guidelines, a Company will have to create debenture redemption reserve equivalent to the amount of the following percentage of debenture issued: |
| A. | 50% |
| B. | 25% |
| C. | 70% |
| D. | 100% |
| Answer» B. 25% | |
| 280. |
Premium on redemption of debentures is a |
| A. | personal a/c |
| B. | real a/c |
| C. | nominal a/c |
| D. | suspense a/c |
| Answer» A. personal a/c | |
| 281. |
Debentures cannot be redeemed at |
| A. | par |
| B. | premium |
| C. | discount |
| D. | more than 10% premium |
| Answer» C. discount | |
| 282. |
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 | |
| 283. |
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 | |
| 284. |
Share application account is a…. |
| A. | nominal |
| B. | real |
| C. | personal |
| D. | none of these |
| Answer» C. personal | |
| 285. |
Penalty for delay in refunding application money |
| A. | 6% |
| B. | 5% |
| C. | 15% |
| D. | 20% |
| Answer» C. 15% | |
| 286. |
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 | |
| 287. |
Public limited companies cannot issue …. |
| A. | equity shares |
| B. | deferred shares |
| C. | preference shares |
| D. | right shares |
| Answer» B. deferred shares | |
| 288. |
Preference shareholders are …. of the company |
| A. | creditors |
| B. | owners |
| C. | customers |
| D. | borrowers |
| Answer» B. owners | |
| 289. |
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 | |
| 290. |
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 | |
| 291. |
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 | |
| 292. |
On calls in advance, interest is payable @ …. |
| A. | 5% |
| B. | 6% |
| C. | 4% |
| D. | Nil |
| Answer» B. 6% | |
| 293. |
Right shares are those shares which are issued to |
| A. | directors |
| B. | promoters |
| C. | existing shareholders |
| D. | none of these |
| Answer» C. existing shareholders | |
| 294. |
After completing ….years a company can issue shares at discount. |
| A. | 2 |
| B. | 3 |
| C. | 1 |
| D. | 4 |
| Answer» C. 1 | |
| 295. |
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 | |
| 296. |
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 | |
| 297. |
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 | |
| 298. |
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. | |
| 299. |
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 | |
| 300. |
Preference share holders are entitled to a fixed rate of ------- |
| A. | interest |
| B. | dividend |
| C. | coupon |
| D. | capital |
| Answer» B. dividend | |
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