More MCQs
601.

In the case of marine hull insurance, reserve for unexpired risk is to be maintained @....... %of net premium

A. 50%
B. 80%
C. 100%
D. 20%
Answer» C. 100%
602.

The cost of replacing an asset in its original condition is known as……

A. replacement cost
B. revaluation cost
C. revenue cost
D. reconstruction cost
Answer» A. replacement cost
603.

The method of rapidly posting entries in the books of banks is called as …… ….

A. Single Entry
B. Cash Method
C. Slip System
D. None of these
Answer» C. Slip System
604.

The P&L A/c of Banking Companies are prepared as per …………. of Banking Regulation Act.

A. Form A of Schedule III
B. Form B of Schedule III
C. Form A of Sch edule VI
D. Form B of Schedule VI
Answer» B. Form B of Schedule III
605.

…….. deals with separate financial statements.

A. Ind AS 110
B. Ind AS 100
C. Ind AS 112
D. Ind AS 120
Answer» A. Ind AS 110
606.

The pre- acquisition loss of subsidiary should be deducted from …….. while calculating net assets

A. share capital
B. equity share capital
C. debentures
D. none
Answer» B. equity share capital
607.

Ind AS ……. Deals with share based payments

A. 102
B. 110
C. 101
D. 105
Answer» A. 102
608.

The accounting concept that is principally used to classify leases into operating and finance is…….

A. substance over from
B. prudence
C. neutrality
D. completeness
Answer» A. substance over from
609.

Buy back of equity shares is a process of capital ……..

A. reduction
B. restructuring
C. control
D. none
Answer» B. restructuring
610.

Assets are NPAs for a period exceeding 12 months are called ………….

A. Standard Assets
B. Substandard Assets
C. Doubtful Assets
D. Loss Assets
Answer» C. Doubtful Assets
611.

………is a form of agreement between two parties in which one party agrees to make good for loss of another.

A. Contract
B. Insurance
C. Banking
D. Mutual fund
Answer» B. Insurance
612.

The buy back of shares is also known as ……..

A. corporate redemption
B. corporate equity repurchase
C. corporate equity valuation
D. none
Answer» B. corporate equity repurchase
613.

The buy back of shares may be done

A. at par
B. at discount
C. at premium
D. all the above
Answer» D. all the above
614.

Interest on debenture is ….

A. adjustment of profit
B. appropriation of profit
C. charge on profit
D. none
Answer» C. charge on profit
615.

After all the debentures are redeemed the balance in the sinking fund is transferred to

A. General reserve
B. statutory reserve
C. both A and B
D. none
Answer» A. General reserve
616.

Debenture is document which creates a……

A. debt
B. credit
C. both A and B
D. none
Answer» A. debt
617.

When own debentures are cancelled, any profit on cancellation is transferred to

A. general reserve
B. capital reserve
C. p&laccount
D. none
Answer» B. capital reserve
618.

Profit not available for dividend includes

A. CRR
B. P&L account credit balance
C. security premium
D. None
Answer» B. P&L account credit balance
619.

All the …… profits are not available for the purpose of redemption of preference shares

A. revenue
B. capital
C. Both A and B
D. none
Answer» B. capital
620.

Profit and Loss Account of General Insurance Companies are prepared in … ………

A. Form A‐PL
B. Form B‐RA
C. Form B‐PL
D. Form B‐BS
Answer» C. Form B‐PL
621.

The principle of subrogation is applicable to……………

A. Fire Insurance
B. Marine Insurance
C. Burglary Insurance
D. All of thes
Answer» D. All of thes
622.

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
623.

The security premium account is shown in the balance sheet under the head……….

A. Share capital
B. Reserves & Surplus
C. Secured loans
D. Current liabilit
Answer» B. Reserves & Surplus
624.

……..should be deducted from the share capital to determine the paid up cap ital.

A. Security premium
B. Calls in advance
C. Calls in arrears
D. Discount on issue
Answer» C. Calls in arrears
625.

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
626.

Discount or loss on issue of debenture is shown in the balance sheet under the head ……..

A. Reserves & Surplus
B. Secured loans
C. Current liabilities
D. Miscellaneous expenditure
Answer» D. Miscellaneous expenditure
627.

Debentures can be redeemed out of ……….

A. Fresh issue
B. Capital
C. Profit
D. All of these
Answer» D. All of these
628.

When preference shares are redeemed, it amounts to

A. increase in share capital
B. decrease in share capital
C. Both A and B
D. none
Answer» D. none
629.

Capital redemption reserve is created….

A. out of security premium
B. to meet legal requirements
C. Voluntarily
D. none
Answer» B. to meet legal requirements
630.

No company limited by shares shall issue any preference share which is redeemable after the expiry of …….. years from the date of issue.

A. 20
B. 15
C. 10
D. 25
Answer» A. 20
631.

Under Double account system, the balance sheet is prepared in ……parts

A. three
B. two
C. one
D. none
Answer» B. two
632.

In case of electricity companies, contingency reserve is created until it amounts to ….. of the original cost of the fixed assets.

A. 5%
B. 6%
C. 4%
D. 8%
Answer» A. 5%
633.

The profit and loss account under double account system is termed as…..

A. revenue account
B. income and expenditure account
C. P&L account
Answer» A. revenue account
634.

General insurance policies are generally taken for

A. one year
B. two years
C. three years
D. none
Answer» A. one year
635.

IRDA Act came into effect in

A. 1938
B. 1999
C. 2000
D. none
Answer» B. 1999
636.

Reserve for unexpired risk is shown under

A. reserves and surplus
B. current liabilities
C. provisions
D. none
Answer» C. provisions
637.

The Insurance Act came in to effect in …..

A. 1956
B. 1998
C. 1938
D. 2000
Answer» C. 1938
638.

The fixed assets of an insurance company are shown in

A. Schedule 6
B. Schedule 7
C. Schedule 8
D. none
Answer» D. none
639.

Banks show the provisions for income tax under the head

A. contingency accounts
B. contingent liability
C. other liabilities and provisions
D. borrowings
Answer» C. other liabilities and provisions
640.

If the purchase price of debentures includes interest for the expired period, the quotation is said to be …………..

A. Ex‐interest
B. Cum‐interest
C. Co‐interest
D. None of these
Answer» B. Cum‐interest
641.

Grants related to depreciable assets should be recognised as……., in the period in which their depreciation is charged

A. income
B. appropriaton
C. provisions
D. none
Answer» A. income
642.

….. lease is a lease that transfers substantially all the risks and rewards incidental o ownership of assets

A. finance
B. operating
C. advanced
D. maturity
Answer» A. finance
643.

……….. is called factory of credit

A. company
B. bank
C. firm
D. none
Answer» B. bank
644.

Banking companies are governed in India by

A. Banking Regulation Act
B. Indian Companies Act
C. RBI Act
D. all the
Answer» A. Banking Regulation Act
645.

Schedule 1 is concerned with

A. Capital
B. Reserves and surplus
C. interest earned
D. none
Answer» A. Capital
646.

Interest on debentures is calculated on ______.

A. Issue price.
B. redeemable price
C. face value
D. market price.
Answer» C. face value
647.

Transfer to capital redemption reserve can be made from ____.

A. capital reserve.
B. forfeited shares.
C. general reserve
D. securities
Answer» C. general reserve
648.

Rights shares are those shares which are __________.

A. first offered to the existing shareholders
B. issued by a newly formed company.
C. issued to the directors of the company.
D. issued to holders of convertible debentures.
Answer» A. first offered to the existing shareholders
649.

In subdivision of shares, …… capital does not change

A. Paid up
B. Issued
C. unissued
D. none
Answer» A. Paid up
650.

No journal entry is required for the cancellation of ………. Share capital

A. Unissued
B. paid up
C. Subscribed
D. none
Answer» A. Unissued
651.

All business combinations are accounted for by applying the …….. method

A. acquisition method
B. Equity method
C. both A and B
D. none
Answer» A. acquisition method
652.

A term loan will be treated as NPA if interest or instalment and principal remain overdue for a period more than ……. Days

A. 75
B. 50
C. 90
D. 100
Answer» C. 90
653.

Which of the following does not include under the head other assets

A. silver
B. interest accrued
C. gold
D. inter office adjustment
Answer» C. gold
654.

………is the dividend declared in the annual general meeting of shareholders.

A. Proposed Dividend
B. Final Dividend
C. Interim Dividend
D. None of these
Answer» B. Final Dividend
655.

Clear profit is the difference between

A. reasonable return and appropriations
B. total income and expenditure
C. reasonable return and total profit
D. none
Answer» B. total income and expenditure
656.

Surplus of electricity company is limited to

A. 20% of capital base
B. 20% of total assets
C. 20% of clear profit
D. 20% of reasonable return
Answer» D. 20% of reasonable return
657.

In the case of railway companies rent on leased lines is shown on

A. debit side of revenue A/c
B. credit side of revenue A/c
C. debit side of net revenue A/c
D. credit side of net revenue A/c
Answer» C. debit side of net revenue A/c
658.

The acquiree in a business combination is also called a….. company

A. subsidiary
B. parent
C. holding
D. controlling
Answer» A. subsidiary
659.

When 8,00,000 shares of Rs.10 each is converted in to 80,000 shares of Rs.100 each, it is a case of ………

A. sub division
B. capital reduction
C. consolidation
D. none
Answer» C. consolidation
660.

Section …… of the Companies Act 2013 deals with the issue of right shares

A. 62
B. 63
C. 64
D. 68
Answer» A. 62
661.

A company formed and registered under ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Act 1956.

A. Partnership
B. Companies
C. Banking companies
D. none of these.
Answer» B. Companies
662.

A ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Company puts restriction on the transfer of its shares.

A. Private company
B. Public company
C. Limited companies
D. None of these.
Answer» A. Private company
663.

A new company cannot issue shares at‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

A. Premium
B. Discount
C. Par
D. None of these.
Answer» B. Discount
664.

‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is an invitation made by the company to the public for subscribing its shares.

A. Memorandum of association
B. Articles of association
C. Prospectus
D. Table A.
Answer» C. Prospectus
665.

The maximum extent to which a company can raise share‐capital is called ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ capital.

A. Subscribed
B. Authorized
C. Called
D. Reserve capital.
Answer» B. Authorized
666.

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Shares carry a fixed rate of dividend.

A. Preference
B. Equity
C. Deferred
D. Sweat equity.
Answer» A. Preference
667.

Share application account is in the nature of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ account.

A. Personal
B. Real
C. Nominal
D. None of these.
Answer» A. Personal
668.

The discount on the issue of shares should not exceed ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ normally.

A. 10%
B. 20%
C. 30%
D. None of these.
Answer» A. 10%
669.

Profit on the re‐issue of forfeited shares is transferred to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ account.

A. General reserve
B. Capital reserve
C. Capital redemption reserve
D. none of these.
Answer» B. Capital reserve
670.

Capital reserve will appear on the liability side of the balance sheet under the head ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

A. Reserves & surpluses
B. Secured loan
C. Unsecured loan
D. Current liabilities.
Answer» A. Reserves & surpluses
671.

Profit on re‐issue of forfeited shares will appear on the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ side of the balance sheet.

A. Asset side
B. Liability side
C. Debit side
D. Credit side.
Answer» B. Liability side
672.

Debentures are normally paid back after the expiry of the period this is technically called ‐‐‐‐‐‐‐‐‐‐‐‐.

A. Renewal
B. Redemption
C. Conversion
D. Forfeiture
Answer» B. Redemption
673.

Redemption of debentures means ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Creation of liability
B. Discharge of liability
C. Concession of liability
D. None of these.
Answer» B. Discharge of liability
674.

Premium on redemption of debentures account is in the nature of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Personal account
B. Real account
C. Nominal account
D. None of these.
Answer» C. Nominal account
675.

After all the debentures are redeemed; the balance in the sinking fund account is transferred to ‐‐‐‐‐‐ ‐‐‐‐‐‐‐.

A. Capital reserve
B. General reserve
C. Profit and loss account
D. Capital redemption reserve.
Answer» B. General reserve
676.

When own debentures are cancelled, any profit on cancellation is transferred to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Profit and Loss Account
B. General reserve
C. Capital Reserve
D. Sinking fund
Answer» C. Capital Reserve
677.

For the same purchase price profit on cancellation of debentures is more when purchase on ‐‐‐‐‐‐‐‐‐‐‐ ‐‐ basis.

A. Ex‐Interest
B. Cum‐Interest
C. Own Debentures basis
D. None of these.
Answer» B. Cum‐Interest
678.

When debentures are redeemed from out of profits an equal amount is transferred to ‐‐‐‐‐‐‐‐‐‐‐‐ account.

A. Capital reserve
B. Capital Redemption Reserve
C. Debenture redemption reserve
D. General Reserve.
Answer» C. Debenture redemption reserve
679.

When debentures are redeemed in annual installments the redemption is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

A. Redemption by drawing a lot
B. Redemption out of capital
C. Redemption out of profit
D. Redemption by conversion.
Answer» A. Redemption by drawing a lot
680.

a preference share is one which enjoys a preferential right regarding payment of ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Dividend
B. Share capital
C. Interest
D. Debentures.
Answer» B. Share capital
681.

The issue of shares at discount provided the discount does not exceed 10% as specified in ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐ of the companies Act.

A. Section80
B. Section 81
C. Section 79
D. Section 76
Answer» C. Section 79
682.

The share premium account can be utilized to write off the ‐‐‐‐‐‐‐‐‐‐‐‐‐ expense of the company.

A. Printing expenses
B. Establishment expenses
C. Preliminary expenses
D. None of these.
Answer» C. Preliminary expenses
683.

Which of the following not the uses of share premium.

A. Issue of partly paid bonus shares
B. Issue of fully paid bonus shares
C. Write off preliminary expense
D. Write off expenses on the issue of shares.
Answer» B. Issue of fully paid bonus shares
684.

When shares originally issued at discount are forfeited, the discount in respect of them is to be ‐‐‐‐‐‐‐

A. Debited
B. Credited
C. Paid
D. None of these
Answer» B. Credited
685.

Once the share premium account is credited the same, if the premium is not received.

A. Cannot be debited
B. Cannot be credited
C. Can be debited
D. Can be credited
Answer» C. Can be debited
686.

Dividend is payable on the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of the shares.

A. Paid up value
B. Called up value
C. Calls in advance
D. None of these.
Answer» A. Paid up value
687.

Share can be forfeited for ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

A. For non‐payment of call money
B. For failure to attend meetings
C. Failure to repay the loan
D. None of these.
Answer» A. For non‐payment of call money
688.

When shares are forfeited the share capital account is debited by ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Calls‐in‐arrears
B. Called up amount
C. Paid up amount
D. Subscribed amount
Answer» C. Paid up amount
689.

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ have priority over equity as to the receipt of individuals and as to assets in the event of liquidation.

A. Equity shares
B. Deferred shares
C. Preference shares
D. Sweat equity shares
Answer» C. Preference shares
690.

Preference shares cannot be redeemed unless they are ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Partly paid
B. Fully paid
C. Twice paid up
D. One by two paid up.
Answer» B. Fully paid
691.

Called up capital minus calls in appear is ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Subscribed capital
B. Registered capital
C. Paid up capital
D. Uncalled capital.
Answer» C. Paid up capital
692.

The minimum amount of capital which must be subscribed by the public before a public company can allot shares is ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Allotment money
B. Minimum subscription
C. Subscribed capital
D. Issued capital.
Answer» B. Minimum subscription
693.

Find the odd one:‐

A. Subscribed capital
B. Authorized capital
C. Registered capital
D. Nominal capital
Answer» A. Subscribed capital
694.

When 500 shares of Rs. 10 each on which Rs.3 on final call is not paid, share forfeited account is credited with ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Rs.1,500
B. Rs.3,500
C. Rs.5,000
D. Rs.2,000
Answer» B. Rs.3,500
695.

If one share is allotted for every five shares applied, an applicant for 1,000 shares will get ‐‐‐‐‐‐‐‐‐‐‐

A. 200 shares
B. 5000 shares
C. 5 shares
D. 6 shares.
Answer» A. 200 shares
696.

If a share of Rs.10 is issued at a premium of 20%, the issue price is ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Rs.8
B. Rs.12
C. Rs.2
D. None of these.
Answer» B. Rs.12
697.

Right issue means issue of shares to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

A. Existing debenture holder
B. Existing share holders
C. Promoters
D. Institutional investors
Answer» B. Existing share holders
698.

Find the odd one:‐

A. To issue fully paid bonus shares
B. To Write off preliminary expenses
C. To distribute dividend in cash
D. To pay Premium payable on redemption of shares or debentures.
Answer» C. To distribute dividend in cash
699.

When shares are oversubscribed, allotment is made on ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ basis

A. First come first served
B. Pro‐data
C. Total
D. None of these.
Answer» B. Pro‐data
700.

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ capital of a company can be called up only in the event of winding up.

A. Reserve
B. Authorized
C. Registered
D. Nominal
Answer» A. Reserve
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