Accountancy and Financial Management 4 MCQ Collection (Semester 4 Part 3)

Accountancy and Financial Management IV

Accountancy and Financial Management 4 Second Year B.Com Sem 4 MCQ Collection

01) If company redeems Rs. 1,00,000 preference shares by issue of Rs.70,000 Equity shares the capital redemption reserve will be----

1. Rs.30,000
2. Rs.50,000
3. Rs.1,00,000
4. Rs.45,000

Answer: Rs.30,000

02) The balance in sinking fund for redemption of debenture a/c is transferred to -----

1. Profit & loss a/c
2. Investment a/c
3. General reserve a/c
4. Capital reserve a/c

Answer: General reserve a/c

03) To calculate profit prior to incorporation formation expenses are -----

1. debited to preincorporation period
2. debited to post incorporation period
3. allocated in saes ratio
4. Allocated on time basis

Answer: debited to post incorporation period

04) The amount of capital actually offered to public is called -------

1. issued capital
2. Paid up capital
3. Authorised capital
4. subscribed capital

Answer: issued capital

05) Debentures for which a charge is created on the assets of company are known as ------

1. convertible debentures
2. unsecured debentures
3. secured debentures
4. redeemable debentures

Answer: secured debentures

06) In the balance sheet of a company Debentures a/c is shown under -------

1. share capital
2. unsecured loans
3. long term borrowing
4. Current liabilities

Answer: long term borrowing

07) Purchased land & building worth Rs.200,000and company issued 12% debentures of Rs.100 each at a discount of 20% then debentures a/c will be credited by Rs.---

1. Rs.2,60,000
2. Rs.2,50,000
3. Rs.240,000
4. Rs.1,60,000

Answer: Rs.2,50,000

08) Purchased machinery worth Rs.400,000 and company issued 12% debentures of Rs.100 each at a premium of 20% then debentures a/c will be credited by Rs.---

1. Rs.5,00,000
2. Rs.4,00,000
3. Rs.6,00,000
4. Rs.4,50000

Answer: Rs.5,00,000

09) Purchased furniture worth Rs.9,00,000 and company issued 12 % debentures of Rs.100 each at 10% discount then debentures a/c will be credited by Rs.

1. Rs.8,10,000
2. Rs.9,00,000
3. Rs.10,00,000
4. Rs.12,00,000

Answer: Rs.10,00,000

10) Purchased furniture worth Rs.4,80,000 and company issued 12% debentures of Rs.100 each at 20% discount then debentures a/c will be credited by Rs.

1. Rs.6,00,000
2. Rs.5,00,000
3. Rs.4,80,000
4. Rs.5,60,000

Answer: Rs.6,00,000

11) Debentures issued in the nature of contingent liability on which no interest is payable are known as

1. Debentures issued as collateral security
2. Naked debentures
3. Bearer debentures
4. Debenture stock

Answer: Debentures issued as collateral security

12) When preference shares are redeemed out of profits an amount equal to face value of shares redeemed is to be transferred to -----

1. General reserve
2. Capital redemption reserve
3. security premium a/c
4. Revaluation reserve

Answer: Capital redemption reserve

13) When debentures are redeemed out of profits an amount equal to face value of debentures redeemed should be transferred to

1. general reserve
2. Capital redemption reserve
3. security premium a/c
4. Revaluation reserve

Answer: general reserve

14) The profit earned after incorporation is ----

1. Revenue profit
2. Capital profit
3. Deferred revenue income
4. Belongs to the vendor

Answer: Capital profit

15) For calculating preincorporation profit directors fees are -----

1. debited to preincorporation period
2. debited to post incorporation period
3. allocated in sales ratio
4. Allocated on time basis

Answer: debited to post incorporation period

16) For computing preincorporation profits interest to vendors on purchase consideration -----

1. Is treated as preincorporation expenditure
2. Is treated as post incorporation expenditure
3. allocated in time ratio of acquisition of business to settlement of p.c.
4. Allocated on time basis

Answer: allocated in time ratio of acquisition of business to settlement of p.c.

17) For the purpose 0f calculating preincorporation profit Gross profit is --------

1. Allocated in sales ratio
2. allocated in time ratio
3. credited to post incorporation period
4. credited to preincorporation period

Answer: Allocated in sales ratio

18) For the purpose 0f calculating preincorporation profit carriage outward is -----

1. Allocated in sales ratio
2. allocated in time ratio
3. credited to post incorporation period
4. credited to preincorporation period

Answer: Allocated in sales ratio

19) For the purpose of calculating preincorporation profits Audit fees are__

1. debited to post incorporation
2. debited to preincorporation
3. allocated in time ratio
4. allocated in sales ratio

Answer: allocated in time ratio

20) For computing preincorporation profits share issue expenses are ------

1. Divided in sales ratio
2. Divided in time ratio
3. Debited to preincorporation
4. debited to post incorporation

Answer: debited to post incorporation

21) For computing preincorporation profit Interest on debentures is -----

1. Divided in sales ratio
2. Divided in time ratio
3. Debited to preincorporation
4. debited to post incorporation

Answer: debited to post incorporation

22) Profit prior to incorporation should be transferred to --------

1. Capital reserve a/c
2. general reserve a/c
3. Net profit
4. Ignored

Answer: Capital reserve a/c

23) For calculating preincorporation profit Discount allowed is =

1. debited to post incorporation
2. debited to preincorporation
3. Divided in sales ratio
4. divided in time ratio

Answer: Divided in sales ratio

24) Incase of cumulative sinking fund for redemption of debentures interest received is -----

1. credited to Profit & loss a/c
2. credited to general reserve a/c
3. credited to sinking fund a/c
4. debited to sinking fund a/c

Answer: credited to sinking fund a/c

25) the periodical interest received on investment against debenture redemption reserve is credited to ----

1. Interest income a/c
2. debenture holders a/c
3. debentures a/c
4. debenture redemption fund a/c

Answer: debenture redemption fund a/c