1. Those preference shares which do not carry the right of share in excess profits are known
as ------- preference shares.
Correct : D. non-participating
2. ------ is deducted from the called- up capital in order to calculate paid-up capital.
Correct : A. calls in arrear
3. Forfeiture of shares results in compulsory termination of ------ due to non payment of
allotment/call money.
Correct : B. membership
4. On forfeiture of shares, which of the following account is credited with the amount of
money already received on such shares?
Correct : A. shares forfeited a/c
5. The discount on re-issue of forfeited shares is debited to ---- a/c.
Correct : B. shares forfeited
6. ------ implies issue and allotment of shares to a selected group of persons and not to
general public.
Correct : C. private placement
7. Right shares are issued to ------
Correct : C. existing share holders
8. Shares which carry preferential rights are called ------
Correct : B. preference shares
9. A company cannot issue redeemable preference shares for a period exceeding ……….
Correct : D. 20 years
10. Preference shares can be redeemed….
Correct : A. If they are fully paid up
11. Premium on redemption of preference shares can be provided out of ….
Correct : D. all of these
12. At present, a company limited by shares cannot issue …..preference shares
Correct : B. irredeemable
13. Capital redemption reserve is created out of
Correct : D. All of these
14. Capital redemption reserve can be utilized for…
Correct : C. issue of fully paid up bonus shares
15. ------- profit means profit which would otherwise be available for distribution of
dividend.
Correct : D. divisible
16. Which of the following is not a source of redemption of preference shares?
Correct : C. realization of asset
17. The nominal value of preference shares to be redeemed can be provided out of ------
Correct : A. general reserve
18. Redemption of preference shares should not be regarded as reduction of ----- capital of
the company.
Correct : D. authorized
19. Buyback of shares should not exceed ….percent of paid up capital and free reserve of the
company.
Correct : D. 25%
20. Under the scheme of buyback of shares , the company in order to perform its obligations , is required to open an ….account
Correct : B. escrow deposit
21. Debenture represents ….of the company
Correct : C. loan
22. Debenture holders are ….of the company
Correct : B. creditors
23. Loss on issue or discount on issue of debenture is a…..asset
Correct : C. fictitious
24. When debentures are redeemed out of profits, an amount equal is transferred to…..
Correct : D. debenture redemption reserve
25. Profit on sale of sinking fund investment is credited to ….
Correct : C. sinking fund
26. When own debentures are cancelled any profit on cancellation is transferred to …
Correct : B. capital reserve
27. Premium on issue of debentures is a….
Correct : B. capital profit
28. ------ is a document which either creates or acknowledges a debt.
Correct : A. debenture
29. -------- debentures are secured by a charge on the assets of the company.
Correct : D. mortgage
30. -------- is a document prepared by the company before the issue of prospectus to the
public for subscription of debentures.
Correct : B. trust deed
31. Companies may issue debentures as security against loans taken from banks/financial
institutions.
Correct : C. collateral
32. Discount on issue of debentures is a ---------
Correct : A. capital loss
33. Which of the following is a method of redemption of debentures?
Correct : D. all of these
34. Interest on debenture is -----
Correct : B. a charge against profit
35. After the redemption of debentures, any credit balance in the Sinking Fund a/c is
transferred to -------- a/c.
Correct : A. general reserve
36. Dividend is paid on …..capital
Correct : B. paid up
37. In the case of joint stock companies , the assets and liabilities in B/S are arranged in the
order of …
Correct : B. performance
38. Dividend declared in between two annual general meeting is called….
Correct : B. interim dividend
39. The amount set aside to meet the loss of bad debt is…
Correct : C. provision
40. Unclaimed dividend is shown in…
Correct : C. Balance sheet
41. Advance payment of tax is a….
Correct : A. Prepaid expense
42. When the proposed dividend exceeds 20% of paid up capital, percentage of profit
transferred to general reserve is…..
Correct : D. 10%
43. Which of the following represents source of fund in the balance sheet of a company?
Correct : D. all of these
44. Which of the following does not represent application of fund of a company?
Correct : C. debentures
45. Which of the following reserves cannot be distributed as dividend to share holders?
Correct : D. all of these
46. Which of the following reserve does not appear in the balance sheet of a company?
Correct : A. secret reserve
47. Fictitious assets are shown on the asset side of the balance sheet of a company under the
heading -----------
Correct : A. Fixed asset
48. Unclaimed dividend is shown on the liability side of the balance sheet of a company as --
-------
Correct : B. current liabilities
49. Dividend may be declared out of ----------------
Correct : D. all of these
50. Financial statement in relation to a company includes:
Correct : D. all of these
51. Which of the following is not a long term borrowing of a company?
Correct : C. loans repayable on demand from banks
52. Calls in advance is shown in the balance sheet as -------------
Correct : A. Current liabilities
53. The difference between gross dividend receivable and dividend received is debited to -
--------
Correct : B. tax deducted at source
54. Pooling of interest method is applicable for amalgamation in the nature of….
Correct : A. merger
55. 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.
Correct : A. 90%
56. Realization loss is transferred to …..
Correct : B. equity shareholders a/c
57. When an existing company takes over the business of one or more existing companies, it
is called….
Correct : B. absorption
58. Accounting for amalgamation is given in….
Correct : A. AS 14
59. Liquidation expenses paid by the transferee company is debited to …
Correct : C. goodwill account
60. Which of the following fictitious assets is not taken over by the transferee company?
Correct : D. all of these
61. Which of the following is considered as an asset while calculating purchase consideration?
Correct : D. all of these
62. The accumulated losses and fictitious assets of the transferor company are transferred to
-------- a/c.
Correct : A. equity share holders
63. Which of the following a/c is debited when statutory reserve of the transferor company
is taken over by the transferee company?
Correct : B. amalgamation adjustment a/c
64. Under purchase method of amalgamation, --------- of the transferor company continues to appear in the balance sheet of the transferee company.
Correct : C. statutory reserve
65. 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 ----------
Correct : B. book value
66. 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 --------
Correct : C. revised value
67. Which of the following should not be considered as a part of purchase consideration?
Correct : C. payment to debenture holders
68. Which of the following is considered while calculating purchase consideration under Net asset method?
Correct : D. all of the above
69. Under net payment method, purchase consideration includes all payments made to the
share holders in the form of ---------
Correct : D. all of these
70. Which of the following is a statutory reserve?
Correct : A. Development Allowance Reserve
71. Any excess amount paid to preference share holders is debited to ------ --- account
Correct : A. realisation
72. 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 -------------
Correct : B. reserves
73. The excess of purchase consideration over net assets of the transferor company acquired by the transferee company should be recognized as -------- in purchase method
Correct : C. good will
74. 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 ------------
Correct : D. capital reserve
75. Alteration of shares of smaller amounts into shares of larger amount is called…..of share
capital
Correct : C. consolidation
76. The amount of surrendered shares is credited to …
Correct : C. capital reduction account
77. Amount sacrificed by shareholders are credited to ….
Correct : C. capital reduction
78. Capital reduction account is used to …
Correct : A. write off losses
79. Any increase in the value of assets is…. to capital reduction
Correct : B. credited
80. --------- is the account created in connection with internal reconstruction.
Correct : B. capital reduction a/c
81. Alteration of shares of larger denominations into smaller denominations is called -------- of shares.
Correct : C. sub-division
82. Which of the following does not involve liquidation of any company?
Correct : A. internal reconstruction
83. Under which of the following circumstances can a company resort to internal
reconstruction?
Correct : D. all of these
84. The balance in capital reduction a/c after writing off all accumulated loss, fictitious
assets and overvalued assets are transferred to -------------
Correct : A. capital reserve
85. Which of the following result in reduction of capital?
Correct : D. all of these
86. Which of the following is not an alteration of capital?
Correct : D. paid off paid up capital in excess of needs of the company.
87. Internal reconstruction can be done by ----------
Correct : D. all of these
88. Which of the following is not a case of combination?
Correct : B. internal reconstruction
89. The term banking is defined in section ….
Correct : A. section 5 of banking regulation Act
90. A bank can open a branch only at the permission of the…
Correct : B. RBI
91. Schedule 16 relates to….
Correct : C. operating expenses
92. Schedule 9 relates to….
Correct : C. advances
93. Banks are required to transfer ….. of their profits to statutory reserve
Correct : B. 25%
94. Assets acquired by a bank in satisfaction of a claim are known as…
Correct : A. non-banking assets
95. Assets which do not carry more than normal credit risk is known as….
Correct : C. standard asset
96. On standard asset a minimum provision of….is required
Correct : C. .40%
97. ------ represents that part of discount received during the year by a bank which
relates to the next accounting year.
Correct : C. unexpired discount
98. A scheduled bank is required to maintain with RBI --------- at a prescribed
percentage of their total time and demand deposit.
Correct : B. CRR
99. 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.
Correct : B. SLR
100. Which of the following is not an advance given by a bank?