Top 250+ Solved Financial Accounting 2 MCQ Questions Answer
Q. Which of the following statement in false:
a. bonus issue is made out of free reserves or securities premium collected in cash only
b. bonus shares can be issued out revaluation profit
c. no bonus issue shall be made within 12 months of any public or right issue
d. company can issue bonus shares in any ratio.
Q. 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.
Q. Which of the following reserves which can be utilised to make partly paid shares into fullypaid 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
Q. 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
Q. 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
Q. 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
Q. Which of the following can be utilized for the redemption of preference shares of acompany out of profit:
a. shares forfeited account
b. development rebate reserve account
c. capital redemption reserve account
d. dividend equalization reserve
Q. Which of the following cannot be utilized for the redemption of preference shares of acompany
a. securities premium on fresh issue of shares
b. general reserve
c. profit and loss account
d. dividend equalization reserve
Q. Which of the following cannot be used for the purpose of creation of capital redemptionreserve account?
a. profit and loss account (credit balance)
b. general reserve account
c. dividend equalization reserve account
d. unclaimed dividends account
Q. 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
Q. 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
Q. According to sec. 100(1)(c) of the companies act, a company can pay back share capitalwhich 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
Q. 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
Q. 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
Q. When bonus share are received the average cost of the existing shares are ______
a. reduced
b. increased
c. equal
d. none of these