1. 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.

Correct : D. both a and b.

2. 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

Correct : D. capital reserve from sale of fixed assets in cash

3. 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

Correct : A. bonus issue is made in lieu of dividend

4. 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

Correct : B. the proceeds of a fresh issue of shares

5. 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

Correct : B. debit redeemable preference share capital a/c; credit preference shareholders a/c

6. 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

Correct : D. dividend equalization reserve

7. 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

Correct : A. securities premium on fresh issue of shares

8. 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

Correct : D. unclaimed dividends account

9. 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

Correct : C. both of the above

10. 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

Correct : A. general reserve account

11. 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

Correct : D. all of the above

12. 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

Correct : D. register of debenture holders

13. 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

Correct : D. all of the above

14. When bonus share are received the average cost of the existing shares are ______

A. reduced

B. increased

C. equal

D. none of these

Correct : A. reduced

15. Bonus shares are issued by ________ free reserves

A. generalizing

B. capitalizing

C. equalizing

D. none of these

Correct : B. capitalizing

16. Bonus shares are issued out of _________

A. capital reserve

B. free reserve

C. share premium

D. none of these

Correct : B. free reserve

17. Right shares are issued to _________ shareholders

A. previous

B. existing

C. future

D. none of these

Correct : B. existing

18. Forfeiture of shares results in compulsory termination of ______ due to non-payment of allotment/call money

A. allotment

B. membership

C. subscription

D. issue

Correct : B. membership

19. 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

Correct : D. to write off preliminary expenses

20. 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

Correct : A. capital reserves a/c

21. 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

Correct : A. payment of dividend and repayment of capital

22. Shareholders get:

A. interest

B. dividend

C. bonus

D. commission

Correct : B. dividend

23. Debenture holders have right to receive _______ even if there is no profit

A. interest

B. commission

C. dividend

D. bonus

Correct : A. interest

24. Debenture holders are the _____ of the company

A. owners

B. customers

C. creditors

D. partners

Correct : C. creditors

25. Dividends are usually paid as a percentage of

A. authorized capital

B. net profit

C. paid up capital

D. called up capital

Correct : C. paid up capital

26. Debentures can be issued only

A. at par

B. at discount

C. premium

D. any of the above

Correct : D. any of the above

27. 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

Correct : C. 10

28. Cancelation of shares mean

A. reissue of shares

B. valuation of shares

C. forfeiture of shares

D. allotment of shares

Correct : C. forfeiture of shares

29. 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

Correct : B. issue on more than face value of shares

30. 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

Correct : A. issue on face value of shares

31. 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

Correct : C. issue on less than face value of shares

32. 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

Correct : B. property of the company

33. 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

Correct : C. long term borrowing of a business

34. 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

Correct : D. miscellaneous expenditure

35. 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

Correct : C. securities premium account

36. 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

Correct : C. writing off the expenses/discount on the issue of debentures

37. 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

Correct : C. called up capital of shares forfeited; amount received on shares forfeited

38. 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

Correct : C. 25% of the issue price of shares

Quiznetik

Financial Accounting 2 | Set 3

1. Right share are not offered to the existing equity shareholders if:

2. Which of the following reserves which can be utilised to make partly paid shares into fully paid up:

3. Which of the following statement is false:

4. Redeemable Preference shares can be redeemed out of __________

5. When Redeemable Preference shares are due for redemption, the entry passed is

6. Which of the following can be utilized for the redemption of preference shares of a company out of profit:

7. Which of the following cannot be utilized for the redemption of preference shares of a company

8. Which of the following cannot be used for the purpose of creation of capital redemption reserve account?

9. The Capital Redemption reserve is created for the following reasons:

10. Which of the following accounts can be transferred to capital redemption reserve account?

11. According to sec. 100(1)(c) of the companies act, a company can pay back share capital which is in excess of need if:

12. Which of the following is not a statistical book of a company?

13. A company can issue share at a discount if

14. When bonus share are received the average cost of the existing shares are ______

15. Bonus shares are issued by ________ free reserves

16. Bonus shares are issued out of _________

17. Right shares are issued to _________ shareholders

18. Forfeiture of shares results in compulsory termination of ______ due to non-payment of allotment/call money

19. Securities premium account can be used for

20. After the issue of forfeited shares, balance of forfeited shares account Is transferred to

21. Preference shares have priority over equity shares for

22. Shareholders get:

23. Debenture holders have right to receive _______ even if there is no profit

24. Debenture holders are the _____ of the company

25. Dividends are usually paid as a percentage of

26. Debentures can be issued only

27. If the minimum subscription is not received by the company, then the refund of application money should be made within ______ days.

28. Cancelation of shares mean

29. To issue shares on premium mean

30. To issue shares on Par mean

31. To issue shares on Discount mean

32. Forfeited shares to become ________

33. Debentures represent the _________

34. Discount on issue of debentures is shown under the heading in a company's Balance Sheet _______

35. The excess price received over the par value of shares, should be credited __________.

36. The Securities Premium amount may be utilized by a company for __________.

37. When shares are forfeited, the share capital account is debited with and the share forfeiture account is credited with __.

38. As per the SEBI guidelines, on issue of shares, the application money should not be less than

Quiznetik

Financial Accounting 2 | Set 3

1. Right share are not offered to the existing equity shareholders if:

2. Which of the following reserves which can be utilised to make partly paid shares into fully paid up:

3. Which of the following statement is false:

4. Redeemable Preference shares can be redeemed out of __________

5. When Redeemable Preference shares are due for redemption, the entry passed is

6. Which of the following can be utilized for the redemption of preference shares of a company out of profit:

7. Which of the following cannot be utilized for the redemption of preference shares of a company

8. Which of the following cannot be used for the purpose of creation of capital redemption reserve account?

9. The Capital Redemption reserve is created for the following reasons:

10. Which of the following accounts can be transferred to capital redemption reserve account?

11. According to sec. 100(1)(c) of the companies act, a company can pay back share capital which is in excess of need if:

12. Which of the following is not a statistical book of a company?

13. A company can issue share at a discount if

14. When bonus share are received the average cost of the existing shares are ______

15. Bonus shares are issued by ________ free reserves

16. Bonus shares are issued out of _________

17. Right shares are issued to _________ shareholders

18. Forfeiture of shares results in compulsory termination of ______ due to non-payment of allotment/call money

19. Securities premium account can be used for

20. After the issue of forfeited shares, balance of forfeited shares account Is transferred to

21. Preference shares have priority over equity shares for

22. Shareholders get:

23. Debenture holders have right to receive _______ even if there is no profit

24. Debenture holders are the _____ of the company

25. Dividends are usually paid as a percentage of

26. Debentures can be issued only

27. If the minimum subscription is not received by the company, then the refund of application money should be made within ______ days.

28. Cancelation of shares mean

29. To issue shares on premium mean

30. To issue shares on Par mean

31. To issue shares on Discount mean

32. Forfeited shares to become ________

33. Debentures represent the _________

34. Discount on issue of debentures is shown under the heading in a company's Balance Sheet _______

35. The excess price received over the par value of shares, should be credited __________.

36. The Securities Premium amount may be utilized by a company for __________.

37. When shares are forfeited, the share capital account is debited with ________ and the share forfeiture account is credited with __________.

38. As per the SEBI guidelines, on issue of shares, the application money should not be less than

37. When shares are forfeited, the share capital account is debited with and the share forfeiture account is credited with __.