Top 1000+ Solved Financial Accounting MCQ Questions Answer
Q. Shares having preferential right as to dividend and repayment of capital are termed as in
a. Equity shares
b. Preference Shares
c. Right Issue
d. Issue of Bonus shares
Q. The amount paid as premium for an insurance policy taken for redemption of debentures is credited at the end of the accounting period to:
a. Insurance Policy Account
b. Debentures Redemption Fund Account
c. Profit and Loss Appropriation Account
d. Insurance Premium
Q. The balance sheet of the debentures sinking fund after redemption of debentures is credited at the end of the accounting period to:
a. Profit and Loss Account
b. General Reserve
c. Debentures Account
d. Profit and Loss Appropriation Account
Q. Debentures issued as Collateral Security for Rs. 10,000 will be debited to:
a. Debentures Suspense Account
b. Bank Account
c. Debentures Account
d. Collateral Security
Q. In case debentures of Rs. 10,000 are issued at par but payable at a premium of 10% the premium payable will be debited to:
a. Debentures Suspense Account
b. Premium on Redemption of Debentures Account
c. Loss on issue of Debentures Account
d. Suspense account
Q. If debentures of the nominal value of Rs. 1,00,000 are issued at discount of 10% for net assets worth Rs. 80,000, the balance of Rs. 10,000 will be debited to:
a. Goodwill Account
b. Capital Reserve Account
c. Profit & Loss Account
d. Suspense account
Q. A reserve created for redemption of debentures at a future date:
a. Debentures Sinking Fund
b. Debentures Redemption Reserve
c. Profit & Loss Appropriation Account
d. Suspense Account
Q. Which of the following statement is false?
a. A company is a legal entity quite distinct from its members.
b. A company can buy its own shares
c. A shareholder is the agent of a company
d. Same person can be agent and creditor of the company
Q. Which of the following are characteristics of the company?
a. Liability of the members is limited up to the face value of the shares held by them
b. It is a voluntary association of persons
c. A company is a separate body can sue and be sued its own name
d. All of the above
Q. Which of the company’s capital is not shown in balance sheet?
a. Authorized Capital
b. Issued and Subscribed Capital
c. Called and Paid up Capital
d. Reserve Capital
Q. Securities Premium Account is shown on the liabilities side under the head:
a. Share Capital
b. Reserves and Surplus
c. Current Liabilities
d. Suspense account
Q. As per section 78 of Company’s Act amount collected as premium on securities cannotbe utilized for:
a. Issuing fully paid bonus shares to the members
b. Purchase of fixed assets
c. Writing off Preliminary Expenses
d. Buy Back of its own shares
Q. The portion of the Authorized Capital which can be called-up only on the liquidation ofthe Company is called:
a. Authorized Capital
b. Reserve Capital
c. Issued Capital
d. Called up Capital
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. Share issued at a discount must belong to a class of shares already issued
c. Issue must take place within two months after the date of sanction by the court or within extended time
d. All of the above
Q. A new company set up by existing companies with five year track record can issue share at premium provided:
a. Participation of existing companies are not less than 50%
b. Prospectus contains justification for issue price
c. The issue price is made applicable to all new investors uniformly
d. All the above