COMPANY ACCOUNTS MCQ Dec 2021

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COMPANY ACCOUNTS MCQ – In this COMPANY ACCOUNTS MCQ with answers

  • Underwriting Agreements are of
    (A) One type
    (B) Two types
    (C) Three types
    (D) Four types
  • Segment Reporting is covered under
    (A) AS 16
    (B) AS 17
    (C) AS 18
    (D) AS 19
  • On redemption of Debentures, the amount lying in Debenture Redemption Reserve,
    which is no longer necessary to be retained, should be transferred to
    (A) Revaluation Reserve
    (B) Securities Premium Reserve
    (C) Capital Reserve
    (D) General Reserve
  • Rate of provisioning by a Bank for Advances doubtful for more than 1 year but less
    than 3 years is
    (A) 25%
    (B) 40%
    (C) 60%
    (D) 100%
  • Balance of Interest Accrued on Security Deposit A/c of an Electricity company should
    be shown
    (A) under Current Liability
    (B) under Non-current Liability
    (C) under Current Asset
    (D) under Non-current Asset
  • Which of the following items is not a part of cash flow from operating activities?
    (A) Collection from customers
    (B) Payment of outstanding wages
    (C) Payment to suppliers of machinery
    (D) Advances to foreign suppliers for raw materials
  • Which of the following is an intangible asset?
    (A) Trade Marks
    (B) Franchises
    (C) Accounts Receivables
    (D) Secret Profit
  • IASB stands for
    (A) International Accounting Standard Board
    (B) Indian Accounting Standard Board
    (C) Institution of Accounting School Board
    (D) None of the above
  • Inventory is
    (A) Included in Fixed Assets
    (B) An investment
    (C) A part of Current Assets
    (D) An intangible
  • Which of the following is/are the source/s of bonus issue of shares?
    (A) Free Reserves
    (B) Securities Premium Account
    (C) Capital Redemption Reserve Account
    (D) All of the above
  • When a shareholder fails to pay calls, the company, if empowered by its articles,
    may_______________
    (A) Surrender the shares
    (B) Forfeit the shares
    (C) Reissue the shares
    (D) All of the above
  • Which of the following is/are the advantage/s of buy-back:
    (A) Free reserves which are utilized for buy-back instead of dividend enhance the
    value of the company’s shares and improve earnings per share
    (B) Surplus cash may be utilized by the company for buy-back and avoid the
    payment of dividend tax
    (C) Buy-back may be used as a weapon to frustrate any hostile take-over of the
    company by undesirable persons
    (D) All of the above
  • Provision is created for
    (A) Unknown Liability
    (B) Known Liability
    (C) Creation of secret reserve
    (D) None
  • If a company has contingent liability it appears in the
    (A) Balance Sheet
    (B) Director‘s Report
    (C) Notes to accounts
    (D) Chair man‘s Report
  • Which of the following is not a financial statement
    (A) P & L A/c
    (B) Balance Sheet
    (C) Fund Flow Statement
    (D) Trial Balance
  • Declaration of dividend is covered under section
    (A) Sec 122
    (B) Sec 123
    (C) Sec 124
    (D) Sec 125
  • Sundry Creditors for Goods or Services, and acceptances should be disclosed as part
    of _.
    (A) Trade payable
    (B) Trade receivable
    (C) Non-current investments
    (D) None of the above
  • Cash receipts from disposal of fixed assets is a/an
    (A) Operating Activity
    (B) Investing Activity
    (C) Financing Activity
    (D) None of the above
  • X Ltd. holds 51% of Y Ltd., Y Ltd. holds 51% of W Ltd., Z Ltd. holds 49% of W. Ltd. As per AS 18, Related Parties are:
    (A) X Ltd., Y Ltd. & W Ltd.
    (B) X Ltd. & Z Ltd.
    (C) Y Ltd. & Z Ltd.
    (D) X Ltd. & Y Ltd. only
  • The fair value of Plan assets of A LTD. at beginning and end of the year 2015-2016
    were Rs. 4,00,000 and Rs. 5,70,000 respectively. The employer’s contribution to the
    plan during the year was Rs. 1,40,000. If benefit payments to retirees were Rs. 1,00,000
    what would be the actual return on plan assets (as per AS15) ?
    (A) Rs. 1,50,000 lakhs
    (B) Rs. 1,30,000 lakhs
    (C) Rs. 1,20,000 lakhs
    (D) Insufficient Information
  • General Ledger of a Banking Company does not contain ____
    (A) Control Accounts of all personal ledgers
    (B) Assets‗ Accounts
    (C) Contra Accounts
    (D) Balance Sheet
  • The Electricity Act, 2003 replaced which of the following three existing legislations?
    (A) The Indian Electricity Act, 1910
    (B) The Electricity (Supply) Act, 1948
    (C) The Electricity Regulatory Commissions Act, 1998
    (D) All of the above
  • Losses of theft are covered by __ insurance policies
    (A) Burglary
    (B) Fire
    (C) Marine
    (D) None of the above
  • Cash receipts from disposal of fixed assets is a cash flow from _ activity
    (A) Operating
    (B) Investing
    (C) Financing
    (D) None of the above
  • Which of the following is not a component of Cash Flow Statement?
    (A) Cash payments to suppliers for goods and services
    (B) Charging of Depreciation
    (C) Cash advances and loans made to third parties
    (D) Cash repayments of amounts borrowed
  • _ Cost of Materials Consumed‖ will come in
    (A) Profit and Loss Account
    (B) Balance Sheet
    (C) Both (A) & (B)
    (D) None of the above
  • 10% Debenture will come under _ of Balance Sheet (Schedule III)
    (A) Long term Borrowing
    (B) Current Liabilities
    (C) Non Current Assets
    (D) Other current Liabilities
  • Which of the following is/are statutory book/s of a company
    (A) Register of Charges
    (B) Register of Members
    (C) Register of Debenture holders
    (D) All of the above
  • For which of the following Share Premium Account may be applied?
    (A) issue of fully paid bonus shares to the members of the company
    (B) writing off preliminary expenses of the company
    (C) writing off the expenses of the commission paid or discount allowed on any issue
    of shares or debentures of the company
    (D) All of the above
  • Which of the following is not a source of Bonus issue of Shares?
    (A) Free Reserves
    (B) Securities Premium Account
    (C) Capital Redemption Reserve Account
    (D) Asset Revaluation Reserves
  • The term current asset doesn‘t cover
    (A) Car
    (B) Debtors
    (C) Stock
    (D) Prepaid expenses
  • Premium on redemption of redeemable preference shares can be paid out of?
    (A) Capital Redemption Reserve account
    (B) Existing shares premium account
    (C) Proceed of fresh issue of shares
    (D) All of the above
  • When shares are allotted, they will be credited to which account?
    (A) Share Capital Account
    (B) Share Allotment Account
    (C) Share Application Account
    (D) Share First and Final Call Account
  • While preparing Cash Flow Statement of XY Ltd., a finance company, interest
    received on loans should be shown as
    (A) Cash Flow from Operating Activities
    (B) Cash Flow from Investing Activities
    (C) Cash Flow from Financing Activities
    (D) Cash and Cash Equivalent
  • As per Schedule III Current Maturities of Long Term Borrowings should be shown under
    (A) Current Assets in Balance Sheet
    (B) Non-current Liability in Balance Sheet
    (C) Current Liabilities in Balance Sheet
    (D) Other Expenses in Statement of Profit and Loss
  • Which of the following is not a criterion for selecting a reportable segment under AS
    17?
    (A) 10% or more of aggregate revenue of all segment
    (B) 10% or more of aggregate assets of all segment
    (C) 10% or more of aggregate liabilities of all segment
    (D) 10% or more of aggregate profit or loss of all segment (higher of the two)
  • Which of the following is not a mandatory financial statement of a General Insurance
    Company as per IRDA regulations?
    (A) Revenue Account
    (B) Profit and Loss Account
    (C) Balance Sheet
    (D) Cash Flow Statement
  • A Banking Company needs to transfer a minimum of __ its profit to reserve fund.
    (A) 10%
    (B) 15%
    (C) 20%
    (D) 25%
  • In case of an electricity company, depreciation on assets is calculated based on the
    rates notified by
    (A) Companies Act 2013
    (B) State Electricity Commission
    (C) Central Electricity Regulatory Commission
    (D) Income Tax Act 1961
  • The Electricity Act, 2003 replaced which of the following three existing legislations?
    (A) The Indian Electricity Act, 1910
    (B) The Electricity (Supply) Act, 1948
    (C) The Electricity Regulatory Commissions Act, 1998
    (D) All of the above
  • Which of the following is a principle of insurance?
    (A) Principle of indemnity
    (B) Insurable interest
    (C) Principle of uberrimae fidei
    (D) All of the above
  • Underwriting commission payable on the shares taken up by the promoters is
    (A) 2.5%
    (B) 2%
    (C) 5%
    (D) Nil
  • Which of the following reserves cannot be used for the purpose of issuing bonus
    shares?
    (A) Revaluation Reserve
    (B) Dividend Equalization Reserve
    (C) Capital Redemption Reserve
    (D) General Reserve
  • In Case of Life Insurance Business, Bonus may be of
    (A) One type
    (B) Two types
    (C) Three types
    (D) None of the above
  • Installment of principal amount of long term loan payable within next 12 months is
    shown under Balance Sheet of a company under the heading
    (A) Non current Assets
    (B) Non current Liabilities
    (C) Current Assets
    (D) Current Liabilities
  • Which of the following is not a condition of buy-back of securities?
    (A) Both fully and partly paid-up securities can be bought back
    (B) Buy-back must be authorized by the Articles of Association
    (C) Buy-back must be authorized by passing a special resolution in general meeting
    (D) Buy-back should be completed within 1 year from the date of passing of special
    resolution
  • A banking company is required to maintain———- provision on unsecured portion
    of doubtful advances
    (A) 25%
    (B) 40%
    (C) 50%
    (D) 100%
  • Which of the following is correct?
    (A) Debenture carries a fixed rate of dividend
    (B) A company limited by shares may issue irredeemable preference shares
    (C) Unmarked applications are those applications that bear the stamp of the
    underwriter
    (D) Except as provided in Section 54, a company shall not issue shares at a discount
  • Profit on forfeiture and re-issue of equity shares is credited to
    (A) Dividend Equalization Reserve
    (B) General Reserve
    (C) Capital Reserve
    (D) Securities Premium
  • In a Balance Sheet prepared under Schedule III of Companies Act, 2013, ‘Share
    application money pending allotment’ shall be shown
    (A) under Shareholder’s Fund
    (B) under Non-current Liabilities
    (C) under Current Liabilities
    (D) as a separate line item.
  • In case of Cash Flow Statement prepared under Direct Method, decrease in current
    liabilities is
    (A) added to cash flow from operating activities
    (B) deducted to cash flow from operating activities
    (C) added to cash flow from investing activities
    (D) None of the above
  • For calculation of depreciation, Central Electricity Regulatory Commission has
    recommended
    (A) Straight Line Method
    (B) Optimized Depreciated Replacement Cost Method
    (C) Written Down Value Method
    (D) Both (A) and (B)
  • In case of Electricity Company while calculating depreciation for the purpose of tariff
    as per Regulation 21, the salvage value of the Asset shall be considered as
    (A) 3%
    (B) 5%
    (C) 10%
    (D) None of the above
  • As per Section 52 of Companies Act 2013, Securities Premium A/c cannot be used
    (A) to issue fully paid up bonus shares
    (B) to pay interim dividend
    (C) to write off the discount on issue of debentures
    (D) to write off the premium on redemption of preference shares
  • At present, a company can issue preference shares which are
    (A) irredeemable
    (B) redeemable after the expiry of 20 years from the date of issue
    (C) redeemable before the expiry of 20 years from the date of issue
    (D) redeemable after the expiry of 25 years from the date of issue
  • In case of purchase of assets under installment payment system, installments due
    after 12 months from the reporting date are shown as
    (A) Current liability
    (B) Current assets
    (C) Non-current liability
    (D) Non-current assets
  • Bonus paid at the end along with the policy amount to the policy holders is called
    (A) Production bonus
    (B) Reversionary bonus
    (C) Gratuitous bonus
    (D) Maturity bonus
  • In relation to an Electricity Company the amount of security deposit = Load x Load
    factor of the category in which the customer falls x Current tariff x _.
    (A) Billing cycle + 45 days
    (B) Billing cycle + 30 days
    (C) Billing cycle + 15 days
    (D) Billing cycle + 20 days
  • In case of a Banking Company General Ledger does not contain
    (A) Control Accounts of all personal ledger
    (B) Assets Accounts
    (C) Contra Accounts
    (D) Revenue Accounts

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