108
93.2k

780+ Corporate Accounting Solved MCQs

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

More MCQs
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

Done Studing? Take A Test.

Great job completing your study session! Now it's time to put your knowledge to the test. Challenge yourself, see how much you've learned, and identify areas for improvement. Don’t worry, this is all part of the journey to mastery. Ready for the next step? Take a quiz to solidify what you've just studied.