Accountancy and Financial Management 4 MCQ Collection (Semester 4 Part 2)

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Accountancy and Financial Management IV


Accountancy and Financial Management IV


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


01) If company wants to redeem preference share capital of Rs.5,75000 and it has General reserve of Rs.600,000 then fresh issue required will be

  1. Rs.25000
  2. Rs,5,75,000
  3. Rs.5,00,000
  4. No fresh issue required

Answer: No fresh issue required

02) If company wants to redeem preference share capital of Rs400000 and it has General reserve of Rs.600,000 then fresh issue required will be

  1. Rs.200,000
  2. Rs.4,00,000
  3. Rs.10,00,000
  4. No fresh issue required

Answer: No fresh issue required

03) Balance of capital redemption reserve is shown under------ in balance sheet

  1. Share capital
  2. Reserves and surplus
  3. Long term borrowing
  4. Current liabilities

Answer: Reserves and surplus

04) The capital redemption reserve a/c can be used for ------

  1. Payment of dividend
  2. writing of losses
  3. issue of fully paid up bonus shares
  4. Making shares fully paid up

Answer: issue of fully paid up bonus shares

05) Premium on redemption of preference shares is -----

  1. Loss to the company
  2. Profit to the company
  3. Income of the company
  4. Expenditure of company

Answer: Loss to the company

06) Calls in arrears is shown under in balance sheet -----

  1. Asset side
  2. Liability side
  3. Deducted from share capital
  4. contingent liability

Answer: Deducted from share capital

07) Provisions regarding redemption of preference shares are given in ----

  1. section 78 of companies act 2013
  2. section 81 of companies act 2013
  3. section 98 of companies act 2013
  4. section 55 of companies act 2013

Answer: section 55 of companies act 2013

08) If preference shares are redeemed by converting them in to equity shares the amount transferred to capital redemption reserve will be----

  1. Equal to face value of preference shares
  2. Rs5,00,000
  3. Rs.1000,000
  4. No need to transfer

Answer: No need to transfer

09) The following balance is not available for transfer to capital redemption reserve

  1. general reserve
  2. dividend equalisation reserve
  3. revaluation reserve
  4. Profit & loss a/c

Answer: revaluation reserve

10) If preference shares are redeemed at premium the premium cannot be provided for -----

  1. out of company's security premium a/c
  2. out of divisible profits
  3. Both 1st and 2nd option
  4. out of fresh issue of shares

Answer: out of fresh issue of shares

11) Subscribed capital can be -----

  1. more than called up capital
  2. More than issued capital
  3. more than authorised capital
  4. Equal to reserve capital

Answer: More than issued capital

12) Which of the following is not true for stock of shares ?

  1. stock is lump sum holding
  2. stock can be issued directly
  3. stock must be fully paid up
  4. stock is never numbered

Answer: stock is never numbered

13) Equity shares can be forfeited for only---

  1. Non payment of call money
  2. not attending meeting
  3. not coming to company
  4. not buying right shares

Answer: Non payment of call money

14) When shares are forfeited----------amount is transferred to share forfeited a/c-----

  1. amount of calls in arrears
  2. amount of face value
  3. amount paid on shares
  4. Discount on reissue

Answer: amount paid on shares

15) Profit on reissue of forfeited shares is transferred to ----

  1. Profit & loss a/c
  2. Capital reserve
  3. share forfeited a/c
  4. Preliminary expenses a/c

Answer: Capital reserve

16) Debenture holders are -----

  1. Creditors of company
  2. Customers of company
  3. suppliers of company
  4. Owners of company

Answer: Creditors of company

17) Who can become directors of company------ ?

  1. Equity shareholders
  2. Debenture holders
  3. Preference share holders
  4. Customers

Answer: Equity shareholders

18) Debentures which are registered with company are called ------

  1. Registered Debentures
  2. Bearer Debentures
  3. Cumulative debentures
  4. non cumulative debentures

Answer: Registered Debentures

19) If debentures are issued as consideration for purchase of any asset the entry is -----

  1. Asset a/c debit to vendors a/c
  2. asset a/c debit to debentures a/c
  3. debentures a/c debit to vendors a/c
  4. vendors a/c debit to asset a/c

Answer: asset a/c debit to debentures a/c

20) The premium collected on issue of Debentures is transferred to -------a/c

  1. Profit & loss a.c
  2. general reserve a/c
  3. security premium a/c
  4. Capital reserve a/c

Answer: security premium a/c

21) A company can redeem debentures by ------

  1. cash only
  2. conversion
  3. out of capital
  4. all the above methods

Answer: all the above methods

22) Loss on issue of debentures is treated as ------

  1. intangible asset
  2. current asset
  3. current liability
  4. Fictitious asset

Answer: Fictitious asset

23) Interest in Debentures is calculated on its ------

  1. Face value
  2. market value
  3. issue price
  4. value payable on redemption

Answer: Face value

24) Interest outstanding on debentures is shown in Balance sheet under ---

  1. share capital
  2. reserves and surplus
  3. current liability
  4. miscellaneous expenditure

Answer: current liability

25) The term Divisible profit means -----

  1. Which can be divided
  2. Out of which dividend can be declared
  3. Profit after tax
  4. profit before tax

Answer: Out of which dividend can be declared






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