Quiznetik

Financial Accounting | Set 4

1. Interest on debenture is

Correct : C. charge on profit

2. In the balance sheet of a company, debentures are shown under which heading

Correct : A. Secured loan

3. In the balance sheet of a company , the discount on issue of debentures is shown under which heading

Correct : D. miscellaneous expenditure

4. Advance payment of tax is in the nature of

Correct : B. prepaid expenses

5. Debentures are shown in the balance sheet under head

Correct : C. secured loan

6. Preliminary expense Is an example of

Correct : D. fictitious asset

7. Divisible profit do not include

Correct : D. revaluation

8. The transfer of profit to reserve should not exceed

Correct : B. 10% of profit

9. Loose tools are shown in the balance sheet under

Correct : C. current asset

10. Discount on shares and debentures are shown in

Correct : B. asset side of the b/s

11. Calls in arrear Is

Correct : B. deducted from share capital

12. The amount set aside to meet the loss of bad debt is

Correct : A. Provision

13. When the proposed dividend exceeds 20% of the paid up capital, percentage of profit to be transferred to reserve is

Correct : A. 10%

14. In the case of joint stock company, goodwill is sown on the asset side under the head

Correct : A. Fixed asset

15. Advance payment of tax should be shown on the

Correct : C. asset side of the B/S

16. Which of the following items will be taken in the P/L a/c below the line

Correct : C. contribution to PF

17. Scrip dividend means

Correct : C. dividend paid other than cash

18. Which of the following would not appear in a limited company’s appropriation a/c

Correct : B. proposed taxation

19. As per the rules framed under the companies Act, 1956, if the dividend proposed by a company is 12% of the paid up capital, the amount to be transferred to reserve must not be less than

Correct : D. 2.5% of the current year profit.

20. Banks show the provision for income tax under the head

Correct : C. other liabilities and provisions

21. Rebate on bills discounted is

Correct : C. income received in advance

22. Which of the following does not include under the head “other asset”

Correct : C. gold

23. A non banking asset is

Correct : B. any asset required from the debtors in satisfaction of claim

24. In a bank balance sheet, unclaimed dividend will be shown under the head

Correct : B. other liabilities

25. With effect from 31/03/2005, a doubt full asset is none which has remained in the substandard category for

Correct : B. 12 month

26. Provision created for substandard is

Correct : A. 10%

27. Provision created for unsecured doubtful debt is

Correct : C. 100%

28. General insurance policies are taken

Correct : A. One year

29. When policy matures on the death of the insured, it is expressed as

Correct : A. With profit policy

30. In the revenue account bonus in reduction of premium is shown as

Correct : C. expense

31. The fixed assets of an insurance company are shown in

Correct : D. none of these

32. Insurance regulation and development authorities act came into effect in

Correct : A. 1938

33. Which of the following of an insurance company does not fall under income from investment

Correct : C. share transfer fee

34. Which of the following of an insurance company is included in other assets

Correct : B. agents balance

35. Reserve for unexpired risk is shown under

Correct : C. provision

36. Which of the following is not an advantage of having a conceptual framework of accounting ?

Correct : C. Considers the needs of all user

37. A conceptual framework for accounting is …

Correct : D. A set of principles underpinning financial reporting

38. Which of the following relate to financial position in a set of financial statements?

Correct : B. Assets, liabilities, income and equity

39. GAAP stands for

Correct : A. Generally accepted accounting principles

40. The global key professional accounting body is -----

Correct : A. Internal accounting standards board

41. The original cost at which an asset or liability is acquired is known as --------

Correct : C. Historical cost

42. The international accounting standards committee was set up in -------------

Correct : C. 1967

43. The process of converting foreign – subsidiary financial statements into the home currency is known as------------

Correct : B. Translation

44. ……………… is an artificial person created by law

Correct : C. Company

45. The liability of shareholders of a company is ………………..

Correct : A. Limited

46. A company is managed by its…………….

Correct : C. Board of Directors

47. . ………….company Is a company created by a special Act in Parliament

Correct : D. Statutory

48. A company registered with Registrar of Companies under Indian Companies Act is called as………..

Correct : B. Registered

49. The company in which the liability of members is liable to pay the agreed amount at the time of winding up is called as …………..

Correct : C. Company limited by guarantee

50. A company in which the transferability of share is restricted is called as …………..

Correct : B. Private Company

51. . ……….is the first stage in the formation of a public company

Correct : A. Promotion

52. Authorised capital is called as……………

Correct : B. Nominal Capital

53. . …………..is that portion of capital which is called up only on winding up of the company.

Correct : D. Reserve capital

54. In case of ……………..preference shares, the arrears of dividend are carried forward and paid out of the profits of the subsequent years.

Correct : C. Cumulative

55. . …………..shares are repayable after the expiry of the fixed period or at the option of the company.

Correct : D. Redeemable

56. A bundle of fully paid shares is called……………..

Correct : A. Stock

57. IPO stands for ………………

Correct : C. Initial Public Offer

58. In …... the company offers the investors an opportunity to bid collectively.

Correct : C. Book building

59. As per the companies Act, the interest on calls in advance is …………..

Correct : B. 6%

60. The rate of interest on Calls in arrears as per Companies Act is …………

Correct : C. 5%

61. The shares of a company can be issued at …………..

Correct : D. All of these

62. Share application account is a ………..

Correct : D. Personal Account

63. The rate of discount on shares cannot exceed ……….

Correct : A. 10%

64. A newly established company cannot issue shares at ……

Correct : C. Discount

65. . ………..of total issued amount of capital is called minimum subscription.

Correct : B. 90%

66. The rate of discount should not exceed ……………. Of nominal vale of shares.

Correct : A. 10%

67. The minimum application money to be paid by an applicant must not be less than …… as per Companies Act.

Correct : B. 5%

68. The excess price received on the par value of shares should be credited to ………….

Correct : C. Security Premium A/c

69. The profit on reissue of forfeited shares is transferred to ………

Correct : C. Capital reserve

70. Preference shareholders are…………

Correct : B. Creditors of the company

71. The shares firstly offered to the existing shareholders are called as ………….

Correct : A. Right shares

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

Correct : B. Reserves & Surplus

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

Correct : C. Calls in arrears

74. The share capital account is debited with …………while forfeiting shares

Correct : C. Called capital

75. On an equity share of Rs. 20, the company has called up Rs. 16 but Rs.14 has been received by the company, the share capital account should be credited by ……

Correct : B. Rs. 16

76. Balance of forfeited share is …….

Correct : B. Capital Reserve

77. When shares are issued at a price higher than their face value, it is called issue at…………..

Correct : B. Premium

78. The shares of a company only can be forfeited after giving a ………days notice

Correct : B. 14

79. The forfeited shares can be reissued at …………

Correct : D. All of these

80. Preference shares cannot be redeemed at ………..

Correct : C. Discount

81. Which of the following is an example for capital profit?

Correct : D. All of these.

82. The allotment of shares in case of oversubscription is called…..

Correct : A. Pro‐rata allotment

83. Security premium account can be utilized for ………….

Correct : D. All of these

84. . …………..is that portion of issued capital which is applied for by the public.

Correct : B. Subscribed capital

85. . ……………is an instrument of acknowledgment of debt.

Correct : C. Debenture

86. Debenture represents ………. Of a company

Correct : A. Borrowed capital

87. Debenture holders will get ……..

Correct : B. Interest

88. Debenture holders are the ……….of a company

Correct : C. Creditors

89. A charge created not on specific assets but generally on all assets is known as………….

Correct : B. Floating charge

90. . …………..debentures can be transferred only with the knowledge of the company.

Correct : C. Registered

91. . ………..debentures are transferable by mere delivery

Correct : D. Bearer

92. . …………debentures are secured by the assets of the company

Correct : B. Mortgage

93. . Unsecured debentures are called as ……………….debentures

Correct : A. Naked

94. FCD stands for ……………

Correct : C. Fully Convertible Debentures

95. Discount or loss on issue of debenture is a ………….

Correct : C. Capital Loss

96. Debentures can be redeemed out of ……….

Correct : D. All of these

97. Interest on debenture is ……….

Correct : C. Charge on profit

98. Debentures are shown in the balance sheet under the head ………..

Correct : A. Secured loans

99. After realizing all the investments, the balance in the sinking fund account is transferred to …………

Correct : D. Capital reserve

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

Correct : B. Capital Reserve