McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) .
| 201. |
Right share are not offered to the existing equity shareholders if: |
| A. | the company in general meeting has so decided by a special resolution |
| B. | decided by an ordinary resolution and same has been approved by the central government |
| C. | right shares are offered to existing shareholders only |
| D. | both a and b. |
| Answer» D. both a and b. | |
| 202. |
Which of the following reserves which can be utilised to make partly paid shares into fully paid up: |
| A. | securities premium |
| B. | capital redemption reserve |
| C. | surplus arising from a change in the method of charging depreciation |
| D. | capital reserve from sale of fixed assets in cash |
| Answer» D. capital reserve from sale of fixed assets in cash | |
| 203. |
Which of the following statement is false: |
| A. | bonus issue is made in lieu of dividend |
| B. | bonus issue is not made unless the partly paid shares are made fully paid up |
| C. | bonus issue must be implemented within six months from the date of approval |
| D. | bonus is simply capitalisation of free reserve |
| Answer» A. bonus issue is made in lieu of dividend | |
| 204. |
Redeemable Preference shares can be redeemed out of __________ |
| A. | the sale proceeds of investments |
| B. | the proceeds of a fresh issue of shares |
| C. | share premium |
| D. | the proceeds of issue of debentures |
| Answer» B. the proceeds of a fresh issue of shares | |
| 205. |
When Redeemable Preference shares are due for redemption, the entry passed is |
| A. | debit redeemable preference share capital a/c; credit cash a/c |
| B. | debit redeemable preference share capital a/c; credit preference shareholders a/c |
| C. | debit preference shareholders a/c; credit cash a/c |
| D. | debit preference shareholders a/c; credit capital reduction a/c |
| Answer» B. debit redeemable preference share capital a/c; credit preference shareholders a/c | |
| 206. |
Which of the following can be utilized for the redemption of preference shares of a company out of profit: |
| A. | shares forfeited account |
| B. | development rebate reserve account |
| C. | capital redemption reserve account |
| D. | dividend equalization reserve |
| Answer» D. dividend equalization reserve | |
| 207. |
Which of the following cannot be utilized for the redemption of preference shares of a company |
| A. | securities premium on fresh issue of shares |
| B. | general reserve |
| C. | profit and loss account |
| D. | dividend equalization reserve |
| Answer» A. securities premium on fresh issue of shares | |
| 208. |
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 | |
| 209. |
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 | |
| 210. |
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 | |
| 211. |
According to sec. 100(1)(c) of the companies act, a company can pay back share capital which is in excess of need if: |
| A. | authorized by articles |
| B. | confirmation of the court |
| C. | special resolution is passed to that effect |
| D. | all of the above |
| Answer» D. all of the above | |
| 212. |
Which of the following is not a statistical book of a company? |
| A. | share application and allotment book |
| B. | register of share warrants |
| C. | register of shares and debentures transferred |
| D. | register of debenture holders |
| Answer» D. register of debenture holders | |
| 213. |
A company can issue share at a discount if |
| A. | one year have been elapsed since the date at which the company was allowed to commence business |
| B. | shares issued at a discount must belong to a class of shares already issued |
| C. | issue must take place within two must after the date of sanction by the court or within extended time. |
| D. | all of the above |
| Answer» D. all of the above | |
| 214. |
When bonus share are received the average cost of the existing shares are ______ |
| A. | reduced |
| B. | increased |
| C. | equal |
| D. | none of these |
| Answer» A. reduced | |
| 215. |
Bonus shares are issued by ________ free reserves |
| A. | generalizing |
| B. | capitalizing |
| C. | equalizing |
| D. | none of these |
| Answer» B. capitalizing | |
| 216. |
Bonus shares are issued out of _________ |
| A. | capital reserve |
| B. | free reserve |
| C. | share premium |
| D. | none of these |
| Answer» B. free reserve | |
| 217. |
Right shares are issued to _________ shareholders |
| A. | previous |
| B. | existing |
| C. | future |
| D. | none of these |
| Answer» B. existing | |
| 218. |
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 | |
| 219. |
Securities premium account can be used for |
| A. | paying tax liability |
| B. | paying dividend on shares |
| C. | allowing discount in reissue of forfeited shares |
| D. | to write off preliminary expenses |
| Answer» D. to write off preliminary expenses | |
| 220. |
After the issue of forfeited shares, balance of forfeited shares account Is transferred to |
| A. | capital reserves a/c |
| B. | share capital |
| C. | general reserves |
| D. | profit & loss a/c |
| Answer» A. capital reserves a/c | |
| 221. |
Preference shares have priority over equity shares for |
| A. | payment of dividend and repayment of capital |
| B. | voting in annual general meeting |
| C. | subscribe for new issue of shares and debentures |
| D. | interest on money invested in company |
| Answer» A. payment of dividend and repayment of capital | |
| 222. |
Shareholders get: |
| A. | interest |
| B. | dividend |
| C. | bonus |
| D. | commission |
| Answer» B. dividend | |
| 223. |
Debenture holders have right to receive _______ even if there is no profit |
| A. | interest |
| B. | commission |
| C. | dividend |
| D. | bonus |
| Answer» A. interest | |
| 224. |
Debenture holders are the _____ of the company |
| A. | owners |
| B. | customers |
| C. | creditors |
| D. | partners |
| Answer» C. creditors | |
| 225. |
Dividends are usually paid as a percentage of |
| A. | authorized capital |
| B. | net profit |
| C. | paid up capital |
| D. | called up capital |
| Answer» C. paid up capital | |
| 226. |
Debentures can be issued only |
| A. | at par |
| B. | at discount |
| C. | premium |
| D. | any of the above |
| Answer» D. any of the above | |
| 227. |
If the minimum subscription is not received by the company, then the refund of application money should be made within ______ days. |
| A. | 7 |
| B. | 9 |
| C. | 10 |
| D. | 22 |
| Answer» C. 10 | |
| 228. |
Cancelation of shares mean |
| A. | reissue of shares |
| B. | valuation of shares |
| C. | forfeiture of shares |
| D. | allotment of shares |
| Answer» C. forfeiture of shares | |
| 229. |
To issue shares on premium mean |
| A. | issue on face value of shares |
| B. | issue on more than face value of shares |
| C. | issue on less than face value of shares |
| D. | initial public offer |
| Answer» B. issue on more than face value of shares | |
| 230. |
To issue shares on Par mean |
| A. | issue on face value of shares |
| B. | issue on more than face value of shares |
| C. | issue on less than face value of shares |
| D. | initial public offer |
| Answer» A. issue on face value of shares | |
| 231. |
To issue shares on Discount mean |
| A. | issue on face value of shares |
| B. | issue on more than face value of shares |
| C. | issue on less than face value of shares |
| D. | initial public offer |
| Answer» C. issue on less than face value of shares | |
| 232. |
Forfeited shares to become ________ |
| A. | property of the government |
| B. | property of the company |
| C. | property of the shareholders |
| D. | property of all the shareholders |
| Answer» B. property of the company | |
| 233. |
Debentures represent the _________ |
| A. | manager's share in a business |
| B. | investment by shareholders in a business |
| C. | long term borrowing of a business |
| D. | none of the above |
| Answer» C. long term borrowing of a business | |
| 234. |
Discount on issue of debentures is shown under the heading in a company's Balance Sheet _______ |
| A. | fixed assets |
| B. | loans and advances |
| C. | investment |
| D. | miscellaneous expenditure |
| Answer» D. miscellaneous expenditure | |
| 235. |
The excess price received over the par value of shares, should be credited __________. |
| A. | calls-in-advance account |
| B. | share capital account |
| C. | securities premium account |
| D. | discount on issue of shares account |
| Answer» C. securities premium account | |
| 236. |
The Securities Premium amount may be utilized by a company for __________. |
| A. | writing off any loss on sale of fixed asset |
| B. | writing off any loss of revenue nature |
| C. | writing off the expenses/discount on the issue of debentures |
| D. | none of these |
| Answer» C. writing off the expenses/discount on the issue of debentures | |
| 237. |
When shares are forfeited, the share capital account is debited with ________ and the share forfeiture account is credited with __________. |
| A. | paid-up capital of shares forfeited; called up capital of shares forfeited |
| B. | called up capital of shares forfeited; calls in arrear of shares forfeited |
| C. | called up capital of shares forfeited; amount received on shares forfeited |
| D. | none of these |
| Answer» C. called up capital of shares forfeited; amount received on shares forfeited | |
| 238. |
As per the SEBI guidelines, on issue of shares, the application money should not be less than |
| A. | 2.5% of the nominal value of shares |
| B. | 2.5% of the issue price of shares |
| C. | 25% of the issue price of shares |
| D. | 25% of the nominal value of shares |
| Answer» C. 25% of the issue price of shares | |
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