1.

Preparation of Final Accounts of Companies

1. The requirements for final account of companies are specified in Schedule
______________.
a) I
b) III
c) XIII
d) XIV

2. The Schedule III prescribes vertical form of Balance Sheet in part.

a) 4
b) 2
c) 3
d) 1

3. The unpaid interest on loan is _____________.

a) loan
b) current liabilities
c) reserve
d) contingent liabilities

4. contingent liabilities Any amount payable within 12 months from date of Balance sheet is
called ______________.
a) capital
b) loan
c) contingent liabilities
d) current liabilities

5. Fixed deposit with bank is a part of ____________.

a) investment
b) bank balance
c) fixed assets
d) loans & advances

6. Calls in arrears is to be ____________.

a) shown as debtors
b) reduced from share capital
c) shown as investments
d) ignored

7. The liabilities of companies are divided_____________ heads.

a) 4
b) 5
c) 6
d) 3

8. The assets of companies are divided in ______________ heads.

a) 5
b) 3
c) 4
d) 6

9. The debit balance in Profit & Loss Account is to be _____________.

a) reduced from share capital
b) reduced from reserve
c) disclosed as miscellaneous expenditure
d) shown as a note to account

10. Schedule II provides for ________________.

a) Depreciation
b) capital
c) loans
d) assets

11. Dividend paid on share capital is to be ___________________.

a) shown as finance expenses
b) shown as appropriations of profit
c) shown in Manufacturing Account
d) shown as reduction in capital

12. Schedule III requires Profit & Loss Account to be prepared in _________________.
a) horizontal form
b) vertical form
c) convenient form
d) columnar form

13. The extract of Balance Sheet format profile is specified in Part __________of Schedule
III.
a) 1
b) 2
c) 3
d) 4

14. The uncalled amount in investment in shares is shown as ________________.

a) investment
b) contingent liabilities
c) current liabilities
d) current assets
15. The transfer to reserve is _______________.
a) 10%
b) 15%
c) voluntary
d) 25%

16. The interest accrued on investment appears in the Balance Sheet under the head:
a) current assets
b) fixed assets
c) loans & advances
d) investments

17. In Balance Sheet, securities premium should be shown under _______________.

a) share capital
b) reserves & surplus
c) current liabilities
d) fixed assets

18. Which of the following items do not come under, reserves & surplus ______________.
a) capital redemption reserve
b) general reserve
c) provident fund
d) sinking fund

19. Opening balance of Profit & Loss A/c was ₹ 7,500, dividend paid ₹. 1,500 ending
balance of Profit & Loss A/c was ₹ 5000. Net income / net loss were ______________.
a) loss ₹ 1,000
b) net loss ₹ 2,000
c) net income ₹. 1,000
d) net income ₹ 6,500

20. Retained earnings is the amount of ____________.

a) profit after tax less dividend
b) profit before tax less dividend
c) profit before depreciation
d) profit after depreciation

21. Which of the following is not an example of fixed assets?

a) plant & machinery
b) buildings
c) royalty
d) patents
22. Unclaimed dividend is shown under___________.
a) current liability
b) secured loans
c) provisions
d) reserves

23. Balance Sheet as on 31st March, 2018.

Share Capital ₹ 20,00,000
Profit & Loss Account (1.4.2017) ₹ 67,000
Profit for the year ₹ 1,90,610
The company wants to transfer ₹ 50,000 to debenture redemption reserve and declare 10%
dividend.
The balance in the Profit & Loss Appropriation Account is _______________.
a) ₹ 2,07,610
b) ₹ 1,88,549
c) ₹ 8,610
d) ₹ 1,81,849

24. Which of the following items appears on the assets side of Balance Sheet?
a) capital reserve
b) security premium
c) sinking fund investment
d) specific reserve

25. Ravi Ltd. proposed a dividend of 15% The called up equity capital of the company is
₹. 3,00,000 calls in arrears amounted to Rs. 20,000 and calls in advance amounted to ₹.
50,000. Dividend payable is ________________.
a) ₹ Nil
b) ₹. 49,500
c) ₹ 39,000
d) ₹ 34,500
No dividend is payable by recommendation.

26. The example of accounting policy is _______________.

a) consistency
b) going concern
c) accrual
d) depreciation

27. The example of accounting policy is ____________.

a) realisation
b) dual aspect
c) maturity
d) valuation of inventory
28. As per AS-1, disclosure should be made of ______________.
a) all accounting principles
b) all accounting policies
c) all accounting concepts
d) all significant accounting policies

29. Which of the following is shown under Reserves & Surplus?

a) calls in advance
b) calls in arrears
c) securities premium
d) bonus

30. Which is deducted from share capital to get paid up capital?

a) calls in arrears
b) calls in advance
c) bonus
d) reserves

31. Payment of dividend is based on _____________.

a) paid up capital
b) authorised capital
c) issued capital
d) reserve capital

32. Unclaimed dividend is shown under ___________.

a) current liabilities
b) current assets
c) reserves and surplus
d) none of the above

33. Final dividend can be declared by ______________.

a) shareholders only
b) directors only
c) stock exchange
d) none of the above

34. Recommendation and declaration is necessary for ______________.

a) final dividend
b) interim dividend
c) interest on debentures
d) none of the above

35. Following is not a fixed asset: _____________.

a) goodwill
b) machinery
c) vehicles
d) loose tools

36. Following is an appropriation of profit: _______________.

a) interest on loan
b) Interim Dividend
c) audit fees
d) none of the above

37. Following is not a secured loan: ________________.

a) debentures
b) bank loans
c) public deposits
d) none of the above

38. Following is not shown under provisions: _______________.

a) provision for taxation
b) provision for dividend
c) provision for depreciation
d) none of the above

39. Forfeited shares is _______________.

a) added to paid up share capital
b) deducted from paid up capital
c) shown under reserves & surplus
d) none of the above

40. The company has 5% Government Securities having face value of ₹ 1,00,000 and cost ₹
95,000. The interest on Government Securities will be ____________.
a) ₹ 5,000
b) ₹ 4,750
c) ₹ 9,750
d) ₹ 7,750

41. Arrears of preference dividend is a ______________.

a) contingent liability
b) current liability
c) fixed liability
d) Loan Funds

42. Balance sheet of a company must be prepared in ______________.

a) horizontal form only
b) vertical form only as per Schedule III
c) either in Vertical or Horizontal form
d) either in Vertical or Horizontal form as per schedule VI

43. Profit and Loss Account of a company must be as per ______________.

a) part II of schedule III of Companies Act
b) Part I of schedule VI of Companies Act
c) vertical form only
d) horizontal form only

44. Repairs to building must be shown as a _________________.

a) separate item on debit side of profit and loss A/c
b) separate item on credit side of profit and loss A/c
c) addition to other expenses on debit side of profit and loss A/c
d) no entry in the Profit and loss A/c

45. Remuneration to M.D. should be shown as a separate item on debit side of ____________
a) Trading A/c
b) Profit and Loss A/c
c) Profit and Loss Appropriation A/c
d) Note to Balance Sheet

46. Payment to auditor should be shown in ______________.

a) Profit and Loss A/c
b) Trading A/c
c) Statement of Profit and Loss
d) Profit and Loss Appropriation A/c

47. Unpaid call is ___________________.

a) added to issued capital and paid up capital
b) shown as a current liability
c) deducted from issued, subscribed and paid up capital
d) added to authorised capital

48. Interest accrued but not due on Loans is shown under _______________.
a) current liabilities
b) secured loans
c) unsecured loans
d) Contingent liability

49. Interest accrued and due on loans is shown under __________________.

a) current liabilities
b) secured loans
c) unsecured loans
d) Reserve & Surplus

50. Unclaimed dividend is shown under _________________.

a) share capital
b) current liabilities
c) provisions
d) unsecured loans

51. Live stock is shown under ___________________.

a) current Assets
b) fixed Assets
c) investments
d) current liabilities

52. Interest accrued on investment is shown under ___________________.

a) current assets
b) current liabilities
c) investments
d) loans and advance

53. Public deposits accepted by companies are shown under ___________________.

a) loans and advances
b) investments
c) secured loans
d) unsecured loans

54. Bills Receivable is shown under _______________.

a) loans and advances
b) current assets
c) current liabilities
d) contingent liabilities

55. Bills payable is shown under ___________________.

a) current assets
b) loans and advances
c) current liabilities
d) secured loans

56. Prepaid insurance is shown under ________________.

a) current assets
b) loans and advances
c) current liabilities
d) secured loans
57. Cost of construction of building under construction is shown under
____________________.
a) Miscellaneous expenditure
b) Capital W.I.P.
c) Profit and Loss A/c
d) Share capital

58. Preliminary Expense are shown under _____________________.

a) Other Current Assets
b) Capital W.I.P.
c) Debit side of Profit and Loss A/c
d) Loans and advance

59. Uncalled amount on partly paid shares is shown under ______________________.

a) a note to Balance Sheet
b) investment
c) share capital
d) provision

60. Arrears of preference dividend is shown as a ________________

a) current liability
b) Note to Balance sheet
c) deduction from preference share capital
d) addition to preference share capital

61. Unexecuted contracts on capital A/c is shown under __________________.

a) a note to Balance sheet as contingent liabilities
b) capital work in progress
c) share capital
d) current liabilities

62. Net Block of fixed assets is shown under ________________.

a) Horizontal Balance sheet
b) Vertical Balance sheet under Fixed Assets
c) Schedule of capital
d) Vertical Balance sheet under Working Capital

63. Net Block is _______________.

a) Current Assets — Current Liabilities
b) Gross Block — Accumulated depreciation
c) Net Block + Depreciation accumulated
d) Share Capital + Reserve & Surplus – Fictitious Assets

64. Unpaid dividend A/c is transferred to ________________.

a) Special Bank Account within 7 days from the expiry of 30 days from the date of
declaration.
b) Special Bank Account within 30 days from the expiry of 7 days from the date of
declaration
c) Investor education and protection fund within 7 days from the expiry of 30 days from the
date of declaration.
d) Investor education and protection fund within 30 days from the expiry of 7 days from the
date of declaration.

65. Short term loan is the loan due for not more than ____________.
a) 2 years
b) 1 year
c) 5 years
d) 3 years

66. In a fixed asset schedule Gross Block Closing is equal to _____________.

a) Opening Gross Block purchases
b) Opening WDV + purchases
c) Opening WDV + sales - purchases
d) Closing WDV + depreciation

67. In a schedule of fixed assets closing depreciation is equal to ___________.

a) opening depreciation + Depreciation provided during the year - depreciation on asset sold
b) opening depreciation + closing WDV
c) closing WDV + opening WDV
d) cost - depreciation

68. When demand for tax is raised by the Income tax department _____________.
a) no entry is passed
b) it is shown as a contingent liability
c) it is debited to profit and loss A/c
d) it is debited to tax paid A/c

69. When demand for tax is raised and it is disputed by the company through an appeal it is
_________.
a) shown as a current liability
b) shown as a contingent liability
c) not entered in the books
d) debited to profit and loss A/c

70. When the demand for tax is raised by the Income tax department and it is accepted by the
company it is ______________.
a) debited to Profit and loss A/c and credited to provision for tax A/c
b) not entered in the books
c) shown as a contingent liability
d) debited to tax paid account

71. When the assessed tax is less than the provision made, it is _____________.
a) debited to tax paid A/c and credited to Profit and Loss A/c
b) not entered in the books
c) debited to provision for tax A/c and credited Profit and Loss A/c
d) none of the above

72. Dividend is calculated on ____________.

a) paid up capital
b) called up capital
c) calls in arrears
d) none of the above

73. Accounting policies are prescribed by _____________.

a) Companies Act
b) AS 1
c) Income tax Act
d) Sales tax Act

74. The following is not shown under share capital of a company _______________.
a) calls in arrears
b) preference share capital
c) forfeited shares A/c
d) preference dividend

75. The following item is not shown as a Reserve ___________.

a) Securities premium
b) Capital Reserve
c) General Reserve
d) Provision for Taxation

76. Interim dividend of a company can be declared by _____________.

a) Shareholders
b) Board of directors
c) M.D
d) SEBI

77. Following is not a contingent liability _______________.

a) Interim dividend
b) Bills discounted
c) Liability under guarantee
d) Arrears of preference dividend
78. Following item cannot be shown under provision _______________.
a) provision for bad debts
b) provision for taxation
c) provision for dividend
d) unclaimed dividend

79. Following is not a secured loan ______________.

a) Naked Debentures
b) Mortgage Debentures
c) Mortgage Loans from Banks
d) Vehicle Loans

80. Following is not shown under Current Asset, Loans and Advances ____________.
a) Closing Stock
b) Bills Receivable
c) Bank balance
d) Preliminary expenses

81. The following is not a fixed asset ________________.

a) Live stock
b) Patents
c) Loose Tools
d) Machinery

82. The following is not recognized as a liability ___________.

a) Audit fees
b) Provision for tax
c) Proposed dividend
d) Director's fees

83. The following is a charge against income _____________.

a) audit fees
b) provision for dividend
c) provision for dividend distribution tax
d) interim dividend

84) Advance tax is shown under _______________.

a) Current liabilities
b) Provisions
c) Loans and Advances
d) Current Assets

85. The asset which is shown under fixed asset is ____________.

a) Loose Tools
b) Vehicles
c) Stock
d) Investment

86. The asset which is intangible is _______________.

a) Railway siding
b) Patents and copyrights
c) Building
d) Vehicles

87. Long term investments are shown in the company Balance sheet under _____________.
a) Fixed assets
b) Investments
c) Current Assets
d) Miscellaneous Expenditure

IND AS compliant financial statement

88. Revised Schedule III is applicable to _____________.
a) All the companies
b) IND AS compliant companies
c) All the private companies
d) All Govt. companies

89. PPE includes ________________.

a) Bearer plants
b) stock of goods
c) Loose Tools
d) Live stock

90. Mango trees are _________________.

a) Bearer plants
b) Biological Assets
c) Agricultural plants
d) Equipment

91. Brands or Trademarks are disclosed under _____________.

a) Other Intangible assets
b) Intangible Assets
c) Goodwill
d) Investment

92. AS per Ind AS animals are shown under ___________.

a) Live stock
b) Biological assets
c) Investments
d) Fictitious assets

93. Bank deposits with more than 12 months’ maturity are disclosed under _____________.
a) Other financial assets
b) Investments
c) Loans
d) Advances

94. Redeemable Preference share capital is disclosed under _____________.

a) Equity
b) Borrowings
c) loans
d) Other equity

95. Share option outstanding is shown under ______________.

a) Equity
b) Other equity
c) Borrowings
d) Investment

96. Debit balance on statement of profit & loss is shown under _____________.
a) Other equity
b) Reserves & Surplus
c) Current Assets
d) Miscellaneous expenditure

97. Prior period tax Expense A/c is transferred to ____________.

a) Tax Payable / Refund A/c
b) Provision for Tax A/c
c) Advance Tax A/c
d) Prior period tax saving A/c

98. Balance on Income tax (Payable / Refund) A/c is transferred to _____________.

a) Tax Payable A/c
b) Refund Receivable A/c
c) Tax Payable or Refund Receivable
d) Provision for Tax A/c

99. As per AS 26 preliminary expenses should be written off ________________.

a) In the year in which it is incurred
b) In five years
c) In ten years
d) In three years

100. Depreciation is provided as per the provision of ______________.

a) Schedule III
b) Schedule II
c) Schedule VI
d) Schedule IX

101. Accounting Standard-1 is _______________.

a) Recommendatory
b) Mandatory
c) Optional
d) No longer valid

102. As per Revised AS 4, proposed dividend should be _______________.

a) Debited to Profit & Loss Appropriation A/c
b) Recognised as a liability
c) Shown as a 'Note' to Balance sheet
d) Shown as a 'Note' to Income Statement

103. A company is empowered to declare and pay interim dividend as per ______________.
a) Section 123
b) Section 189
c) Section 350
d) Section 2

104. Managerial remuneration is governed by _______________.

a) Section 197
b) Section 23
c) Section 320
d) Section 350

105. Premium on share is ___________.

a) add to profit for calculation of Net profit
b) excluded from profit for calculation of Net profit
c) ignored totally
d) less to profit for calculation of Net profit

106. Depreciation to be deducted from profit for deciding managerial remuneration as per
section ______________.
a) 123
b) 371
c) 441
c) 315
107. Maximum remuneration to a managing director in case of profit is ____________.
a) 7.5 %
b) 5%
c) 10%
d) 11%

108. In case of profit overall managerial remuneration shall not exceed ____________.
a) 12.5%
b) 11%
c) 15%
d) 5%

109. In case of loss maximum remuneration is 60 lakhs in case effective capital is less than
_____________.
a) 5 crores
b) 1 crores
c) 25 crores
d) 50 crores

110. If effective capital is more than 100 crores in case of loss, the maximum remuneration
will be ______________.
a) ₹ 1,50,000
b) ₹ 120 lakhs
c) ₹ 2,50,000
d) ₹ 4,50,000

111. In the event of profit remuneration to M.D. shall be maximum _____________.

a) 3% of net profit
b) 7.5 of net profit
c) 5% of net profit
d) 10% of net profit

112. In the event of profit remuneration to part time director, when there is no MD, is
maximum ____________.
a) 5% of net profit
b) 3% of net profit
c) 9% of net profit
d) 11% of net

Answers:-
1 b 36 b 71 c
 2 d 37 c 72 a
3 a 38 c 73 b
4 d 39 a 74 d
5 b 40 a 75 d
6 b 41 a 76 b
7 c 42 b 77 a
8 c 43 a 78 d
9 c 44 a 79 a
10 a 45 b 80 d
11 b 46 c 81 c
12 b 47 c 82 c
13 a 48 a 83 a
14 b 49 b 84 c
15 c 50 b 85 b
16 a 51 b 86 b
17 b 52 a 87 b
18 c 53 d 88 b
19 a 54 b 89 a
20 a 55 c 90 a
21 c 56 b 91 a
22 a 57 b 92 b
23 a 58 a 93 a
24 c 59 a 94 b
25 a 60 b 95 b
26 d 61 a 96 a
27 d 62 b 97 a
28 d 63 b 98 c
29 c 64 a 99 a
30 a 65 b 100 b
31 a 66 a 101 b
32 a 67 a 102 b
33 a 68 a 103 a
34 a 69 b 104 a
35 d 70 a 105 b
106 a
107 b
108 b
109 a
110 b
111 c
112 b

2. Internal Reconstruction
113. Internal Reconstruction requires___________________.
a. Ordinary resolution passed in the General meeting
b. Special resolution passed in the Board meeting
c. Special resolution passed in the General meeting
d. Ordinary resolution passed in the Board meeting

114. In case sub-division of share capital, the total number of

shares________________.
a. Increase
b. Decrease
c. Does not change
d. Surrendered

115. If the shares of smaller denomination are converted into shares of higher
denomination without changing the total amount, then it is a case of
_______________.
a. Consolidation of share capital
b. Sub-division share capital
c. Decrease in unissued share capital
d. Compromise

116. If the shares of higher denomination are converted into shares of smaller
denomination without changing the total amount, then it is a case of
_________________.
a. Consolidation of share capital
b. Sub-division share capital
c. Decrease in unissued share capital
d. Compromise

117. For writing off the accumulated losses under the scheme of internal
reconstruction _______is debited
a. Accumulated losses Account
b. Capital reduction account
c. General reserve account
d. Capital reserve account

118. Amount sacrificed by the shareholders are credited to __________________.

a. Capital reduction account
b. Share surrender account
c. Reserve capital account
d. Capital reserve account

119. Any loss on revaluation of the assets at the time of internal reconstruction will
be charge to _______________.
a. Revaluation account
b. Share capital account
c. Bank account
d. Capital reduction account

120. In internal reconstruction, If the arrears of preference dividend waived by

preference shareholder amounts to _________________.
a. Increase in preference capital
b. Decrease in preference share capital
c. Payment of dividend
d. No entry

121. In internal reconstruction, the balance in capital reduction account is utilized

for ____.
a. Issue of bonus shares
b. Writing of fictitious assets
c. Purchase of assets
d. Issue of shares

122. In the internal reconstruction scheme, any new liability to be provided for
must be met out of _____________________.
a. Trading Account
b. Capital reduction Account
c. Debtors Account
d. General reserve account

123. For any sacrifice made by the creditors, ___________ is debited.

a. Capital reduction account
b. Capital reserve Account
c. Creditors Account
d. Debtors Account

124. Share of ₹100 each (paid up value ₹ 90 each) are reduced to share of nominal
value of ₹ 90 each in a scheme of reconstruction. The capital reduction accounts will
__________.
a. Be credited by ₹10 per share
b. Be credited by ₹100 per share
c. Be credited by ₹90 per share
d. Have no effect

125. Shares of ₹100 each paid up value are reduced to shares of nominal and paid
up value of ₹10 each in the scheme of reconstruction, the amount credited to capital
reduction Account will be _____________.
a.  ₹10 per share
b.  ₹100 per share
c.  ₹90 per share
d.  ₹190 per share

126. In internal reconstruction ________________.

a. No company is liquidated
b. Only one company goes into liquidation
c. Two or more companies are liquidated
d. One or more companies go into liquidation

127. A limited company may alter the share capital so as to ________________.

a. increase its reserve capital
b. sub-divide its shares into shares of smaller amount
c. give option to preference shareholders to get equity shares
d. making payment to creditors

128. Reduction of share capital of a company means reduction in ______________.

a. Only called up share capital
b. Subscribed and/or paid-up share capital
c. Only uncalled share capital
d. Only authorized capital

129. Balance in Capital Reduction A/c is generally transferred to

_________________.
a. General Reserve
b. Capital Reserve
c. Profit & Loss A/c
d. Capital. redemption reserve

130. The existing 1,000 shares of ₹ 1 each are altered to 100 shares of  ₹10 each.
This is known as _________________.
a. Consolidation
b. Conversation in Stock
c. Sub-division
d. Surrender

131. The existing 1,000 shares of ₹ 100 each are altered to 10,000 shares of ₹10
each. This is known as _____________.
a. Sub-division
b. Surrender
c. Consolidation
d. Conversion in Stock
132. While granting approval to any scheme of Capital Reduction, the court may
direct the company to add the following words to its name for such period as t thinks
fit.
a. And Reduced
b. Unlimited and Reduced
c. Limited and Reduced
d. Liquidated

133. Reconstruction refers to an arrangement, whereby ___________________.

a. Two companies come together to form a new company
b. Assets and liabilities of the company are not revalued
c. A previously unprofitable or a weak company is reconstructed by certain measures
d. New company takeover the old company

134. Compromise/Arrangement doesn’t involve ___________________.

a. Equity shareholders giving up their claim
b. Creditors accepting part payment
c. Consolidation of share capital
d. Preference share giving up their right to arrears of dividend

135. Change in the rate of preference dividend payable in future without any
change in the amount of capital is known as ____________________.
a. Reduction in share capital
b. Alteration in share capital
c. Variation of shareholders’ right
d. Compromise

136. Conversion of cumulative preference shares into non-cumulative preference

shares (without any change in the amount of capital), in a scheme of reconstruction,
is known as____________________.
a. Reduction of Share Capital
b. Alteration of Share Capital
c. Variation of Shareholders' Rights
d. Arrangement

137. Surrender of fully paid shares amounts to __________________.

a. Reduction of Share Capital
b. Variation of Shareholders' Rights
c. Alteration of Share Capital
d. Compromise/Arrangement
138. Equity shareholders giving up their claim to the reserves and accumulated
profits amounts to ___________________.
a. Reduction of Share Capital
b. Variation of Shareholders' Rights
c. Alteration of Share Capital
d. Compromise/ Arrangement

139. Debenture holders accepting a cash payment less than the face value of their
debentures amounts to ____________________.
a. Reduction of Share Capital
b. Alteration of Share Capital
c. Compromise/ Arrangement
d. Variation of Shareholders' Rights

140. Extinguishment of the liability in respect of unpaid portion of the face value of
any share, in a scheme of reconstruction, amounts to __________________.
a. Reduction of Share Capital
b. Variation of Shareholders' Rights
c. Alteration of Share Capital
d. Compromise/Arrangement

141. Repayment of any paid-up share capital which is in excess of the wants of the
company, in a scheme or reconstruction, amounts to ___________________.
a. Reduction of Share Capital
b. Variation or Shareholders’' Rights
c. Alteration of Share Capital
d. Compromise/Arrangement

142. Creditors accepting part payment of their claims, in a scheme of

reconstruction, amounts
a. Reduction or snare capital
b. Variation of Shareholders' Rights
c. Alteration of Share Capital
d. Compromise/Arrangement

143. When company converts its equity share into capital stock then then account
to be credited in __________________.
a. Equity share capital account
b. Preference share capital account
c. Equity capital stock account
d. Ordinary share capital account

144. Appreciation in the value of fixed assets at the time of reconstruction will be
credited to _________.
a. Capital reserve account
b. Share capital account
c. Fixed Asset account
d. Capital reduction account

145. At the time of reorganization, the amount of shares surrendered by shareholder

transferred to _____________.
a. Capital reserve account
b. Capital reduction account
c. Surrendered share capital account
d. General reserve account

146. A contingent liability, not provide for materialized to the extent of  ₹1000, the
insurance company paid  ₹ 600 irrespective of this liability. Hence the amount to be
charged to capital reduction account will be ________________.
a.  ₹400
b.  ₹1,600
c.  ₹1,000
d.  ₹600

147. In case of consolidation of share capital, the number of shares of the company
is______.
a. Increase
b. Decrease
c. Remain constant
d. None of the above

148. Reduction of share capital is governed by the companies’ act, 2016 under
section ____.
a. 64
b. 66
c. 61
d. 230

149. If profit is made on sale of any asset, then it is credited to

__________________.
a. Profit and Loss account
b. Capital reserve account
c. Capital reduction account
d. General reserve account

150. Reconstruction expenses paid for implementing the capital reduction scheme
______.
a. Credited to capital reduction account
b. Credited to bank account
c. Debited to bank account
d. Credited to dissolution expenses account

151. Under internal reconstruction, the appreciation in the value of fixed asset
___________.
a. Debited to fixed assets account
b. Credited to fixed asset account
c. Debited to capital reduction account
d. Debited to profit and loss account

152. Under the scheme of internal reconstruction, If the damaged machinery worth
₹1,50,000 is sold as scrap for₹ 25,000, the _____________.
a. ₹25,000 credited to the capital reduction account
b. ₹1,25000 debited to the capital reduction account
c. ₹1,75,000 debited to the capital reduction account
d. ₹1,50,000 debited to the capital reduction account

153. Under the scheme of internal reconstruction, Accrued interest on debenture is

₹2,00,000 and debenture holders are ready to forego 25% of their claim then
________________.
a. Capital reduction account would be credited by 50,000
b. Capital reduction account would be credited by 1,50,000
c. Capital reduction account would be debited by 50,000
d. Capital reduction account would be debited by 1,50,000

154. Capital reduction account is prepared in case of _______________.

a. External reconstruction
b. Internal reconstruction
c. Amalgamation
d. Absorption

155. The scheme of internal reconstruction involves ______________.

a. One company
b. Two companies
c. Three companies
d. Four companies

156. Consolidation and sub-division of shares result in ______________.

a. Reduction in share capital
b. Alteration in share capital
c. Increase in share capital
d. Compromise/Arrangement

157. During internal reconstruction, amount waived by Creditors ______________.

a. Debited to capital reduction account
b. Credited to capital reduction account
c. Credited to creditors account
d. No effect

158. During internal reconstruction, reduction in the liability is _______________.

a. Debited to capital reduction account
b. Credited to capital reduction account
c. Credited to liability account
d. Debited to asset account

159. During internal reconstruction, if contingent liability is forgone it is

________________.
a. Debited to capital reduction account
b. Credited to capital reduction account
c. Debited to contingent liability account
d. Not recorded in capital reduction account

160. The scheme of capital reduction is to be approved by ____________.

a. NCLT
b. SEBI
c. Central Government
d. Shareholders

161. Provision for taxation is Rs.1, 00,000. The tax liability of the company is
settled at Rs.80,000 & it is paid immediately. Amount credited to capital reduction is
_________.
a. ₹ 80,000
b. ₹1,00,000
c. ₹ 20,000
d. ₹ 60,000

162. The various losses can be written off with the help of capital reduction account
at the time of_________________.
a. Internal reconstruction
b. External reconstruction
c. Amalgamation
d. Merger
 Answers:-

113 c 123 c 133 c 143 c 153 a

114 a 124 d 134 c 144 d 154 b

115 a 125 c 135 c 145 c 155 a

116 b 126 a 136 c 146 a 156 b

117 b 127 b 137 a 147 b 157 b

118 a 128 b 138 d 148 b 158 b

119 d 129 b 139 c 149 c 159 d

120 d 130 a 140 a 150 b 160 a

121 b 131 a 141 a 151 a 161 c

122 b 132 a 142 d 152 b 162 a

 3. Buy Back of Equity Shares
163. As per section 68(1) of the Companies Act, buy back of own shares by the company,
shall not exceed_____________________.
a) 25% of the total paid-up capital and free reserves of the company.
b) 20% of the total paid-up capital and free reserves of the company.
c) 15% of the total paid-up capital and free reserves of the company.
d) 10%of the total paid-up capital and free reserves of the company.

164. For buyback of equity shares company can issue ____________

a) Equity shares
b) Debentures
c) Preference shares
d) Promissory Notes

165. When a company purchases its own shares out of free reserves; a sum equal to nominal
value of shares so purchased shall be transferred to___________________.
a) Revenue redemption reserve.
b) Capital redemption reserve.
c) Buyback reserve
d) Free reserve

166. Of the following, preference shareholders do not have a right to vote on

resolutions_________.
a) Which directly affect the rights attached to his preference shares.
b) For entering a private equity agreement to raise further capital diluting their overall stake
in the company.
c) For the repayment.
d) Proceeds of the issue of any shares

167. A company can buy back____________.

a) Equity shares
b) Preference shares
c) Both of the above
d) Equity share can be bought back

168. Equity share can be bought back_________________.

a) Out of profit only
b) Out of proceeds of fresh issue only
c) Out of capital profit only
d) Its free reserves or the securities premium account or the proceeds of shares

169. If equity shares have been bought back out of reserves amount equal to the face value of
equity shares bought back should be transferred to ________________.
a) Development rebate reserves
b) General reserves
c) Sinking fund
d) Capital Redemption reserves

170. On buy back of shares___________________.

a) There is reduction in the share capital to the extent of the face value of the shares bought back.
b) There is a payment from the company to the extent of the price of the shares paid to the
shareholders.
c) The shareholders whose shares are bought cease to be the shareholders of the company,
d) All of the above.

171. A company may purchase his own shares _______________.

a) Its free reserves
b) Securities Premium A/c
c) The proceeds of shares
d) Any or all of the above.

172. Which of the following is not a Free reserves for the purpose of buy back of shares
_____
a) Profit and loss account
b) General reserves
c) Dividend Equalization reserves
d) Revaluation reserves

173. Which of the following is a Free reserves for the purpose of buy back of
shares________.
a) Workmen compensation fund (after meeting liabilities)
b) Capital Redemption reserves balance c/d
c) Debenture Redemption reserve
d) Shares forfeited account

174. No company call purchase its own shares unless the buyback is of less than 25% of
the___
a) Total paid up capital of the company
b) Total paid up capital and reserves of the company
c) Total paid up capital and free reserves of the company
d) Total nominal capital and free reserves of the company

175. Buy back of equity shares in any financial year shall not exceed 25% of its _________.
a) Total paid up equity capital in that financial year
b) Total paid up capital
c) Total paid up equity capital and free reserves of the company
d) Total nominal capital and free reserves of the company

176. On buy back of shares there is a reduction in the share capital to the extent of
the_______.
a) Market value of the shares bought back
b) Face value of the shares bought back
c) Called up value of the shares bought back
d) Un-paid value of shares bought back

177. A buy back of 10% of the total paid up equity capital and reserves of the company.
a) Can be authorized by the shareholders but no special resolution need be passed for the same
b) Can be authorized by the Board but a special resolution need be passed in a general
meeting to ratify the same.
c) Can be authorized by the Board but a special resolution need be passed unanimously by all
the members present to ratify the same.
d) Can be authorized by the Board no special resolution need be passed in a general
meeting.

178. No company shall purchase its own shares unless the buyback is of less than 25% of the
total___________
a) authorized capital of the company
b) Paid up capital of the company
c) paid up capital and free reserves of the company
d) called up capital of the company

179. The buyback of equity shares in any financial year shall not exceed twenty five percent
of its total______________.
a) Authorized capital in that financial year
b) Paid up capital in that financial year
c) paid up capital and free reserves in that financial year
d) called up capital in that financial year

180. The micro corporation Ltd is authorized to issue 1, 00,000 shares of equity shares. It had
issued 30,000 shares. It has bought back 5,000 shares. As a result of these transactions, the
no. of shares (i) in authorized share capital (ii) and (iii) in issued share capital will
be_______.
a) 1,00,000; 25,000
b) 75,000; 25,000
c) 1,00,000; 30,000
d) 75,000; 30,000

181. Preference shareholders will have a right to vote on all resolutions if the dividend
on their share remains unpaid for _____________.
a) 1 year
b) 2 year
c) 3 year
d) 4 years

182. The differential in the class of equity shares can be created for ____________.
a) Dividend.
b) Voting rights.
c) Both (a) and (b).
d) General meeting

183. As per section 68 of the companies act 2013, a company can buy back its own shares out
of_____________.
a) reserve which are available for distribution as dividend
b) securities premium account
c) proceeds of fresh issue of share or other specified securities
d) all of the above

184. Which of the following statement are false?

a) buy back must be authorized by articles of company.
b) a special resolution must be passed for buy back.
c) shares can be partly paid up.
d) none of the above

185. According to section 68 (4) the buyback can be made from _____________.
a) from the open market
b) from the existing shareholders on a proportionate basis.
c) from the employees to whom share are issued under stock option per sweat equity share
d) all of the above

186. Further issue of the share after the buyback can be made for _____________.
a) conversion of debenture preference share into equity shares
b) bonus on issue and conversion of warrants
c) stock option schemes
d) all of the above

187. Company cannot buy back its shares ___________.

a) through its subsidiary
b) through investment or group of investment companies
c) if default in repayment of debts or interest is subsist
d) all of the above

188. Which of the following statements is true?

a) S.55 states that premium payable on buyback should be provided out of the profits of the
company or out of the company's securities premium account.
b) Companies act is silent about how premium payable on buyback should be provided.
c) Companies act states that buyback cannot be made at a premium.
d) None of the above.

189. Which of the following statements is true?

a) Buy-back can be out of free reserves + securities premium.
b) Buy-back can be only out of free reserves. It cannot be out of securities premium.
c) Buy-back can be only out of security premium + capital reserves.
d) None of the above.

190. Which of the following statements is true?

a. Buy-back date is not known on the date of issue.
b. Buy-back date is known on the date of issue.
c. Buy-back date cannot be beyond 10 years from the date of issue.
d. Buy-back date can be beyond 10 years from the date of issue.

191. Which of the following statements is true?

a) The buy-back must be authorised by memorandum of association of the company.
b) The buy-back must be authorised by articles of association of the company.
c) The buy-back must be authorised by the auditors of the company.
d) The buy-back must be authorised by central government.

192. Which of the following statements is true?

a) The buy-back must be authorised by an ordinary resolution passed in general meeting.
b) The buy-back must be authorised by a resolution passed unanimously in a board meeting.
c) The buy-back must be authorised by a resolution passed with the consent of all members
present in a general meeting.
d) The buy-back must be authorised by a special resolution passed in general meeting.

193. According to S.68, Buy-back should be _______________.

a) Less than 25% of the total nominal capital and free reserves of the company.
b) Less than 25% of the total issued capital and free reserves of the company.
c) Less than 25% of the total paid up capital and free reserves of the company.
d) More than 25% of the total paid up capital and free reserves of the company.

194. According to S.68, buy-back of equity shares in any financial year ______________
a) Shall not exceed 25% of its total paid up equity capital and free reserves in that financial
year.
b) Shall not exceed 25% of its total paid up equity capital less free reserves in that financial
year.
c) Shall not exceed 25% of its total paid up equity capital in that financial year.
d) Shall not be less than 25% of its total paid up equity capital in that financial year.

195. According to S.68 ________________.

a) The ratio of the debt owned by the company should not be more than twice the capital and
its free reserves after such buy-back.
b) The ratio of the debt owned by the company should not be more than twice the capital and
its free reserves before such buy-back.
c) The ratio of the capital and its free reserves should not be more than twice the debt owned
by the company after such buy-back.
d) The ratio of the debt owned by the company should not be less than half the capital and its
free reserves before such buy-back.

196. According to S.68, before buy-back all the shares ___________________.

a) Must be fully paid up
b) Must be fully issued and subscribed to the extent of the authorised capital.
c) Must be held by the same shareholder for at least one year.
d) None of the above.

197. According to S.68 every buy-back shall be ___________________.

a) Completed within 12 months from the date of passing of special resolution.
b) Completed within 12 months from the date of authorization by articles of association.
c) Completed within 12 month from the date the shares becoming fully paid up.
d) Completed not before 12 months from the date of passing the special resolution.

198. According to S. 68 following methods can be adopted for buyback ________________.

i. Buy-back from existing security holders on proportionate basis.
ii. Buy-back from the open market.
iii. Buy-back from odd lots
a) Only (i) and (ii)
b) Only (i) and (iii)
c) Only (ii) and (iii)
d) All of the above.

199. Before making a buy-back the company shall________________________.

a) File with the registrar and the SEBI a prospectus.
b) File with the registrar and the SEBI a statement in lieu of prospectus.
c) File with the registrar and the SEBI a declaration of insolvency.
d) File with the registrar and the SEBI a declaration of solvency.

200. Where a company buy-back its own securities _____________________.

a) It shall extinguish and physically destroy the securities so bought-back within 30 days
from the last date of completion of buy-back.
b) It shall hold the securities so bought-back in its physical custody for seven years from the
date of completion of buy-back.
c) It shall re-issue the securities so bought-back within seven days of the last date of
completion of buy-back.
d) It shall extinguish and physically destroy the securities so bought-back within seven days
from the last date of completion of buy-back.

201. A company can buy-back ____________.

a) Equity shares
b) Preference shares
c) Both above
d) None of the above.

202. Equity shares can be bought back __________.

a) Out of profits only
b) Out of proceeds of fresh issue only
c) Out of capital profits only
d) Its free reserves, securities premium account, or the proceeds of shares.

203. If equity shares have been bought-back out of free reserves, amount equal to the face
value of equity share bought back should be transferred to __________________.
a) Development rebate reserve
b) General reserve
c) Sinking fund
d) Capital redemption reserve.

204. On buy-back of shares __________________.

a) There is a reduction in the share capital to the extent of the face value of the shares bought
back.
b) There is a payment from the company to the extent of the price of the shares paid to the
shareholders.
c) The shareholders whose shares are bought cease to be the shareholder of the company.
d) All of the above.

205. A company may purchase its own shares out of ___________________.

a) Its free reserves only
b) The securities premium account only.
c) The proceeds of any shares only.
d) Any or all of the above.

206. Which of the following is not a "free reserve" for the purpose of buyback of shares?
a) Profit or loss account.
b) General reserve.
c) Dividend equalization reserve.
d) Revaluation reserve.

207. Which of the following is a "free reserve" for the purpose of buyback?
a) Workmen's compensation fund (after meeting liabilities)
b) Capital redemption reserve balance b/d.
c) Debenture redemption reserve.
d) Shares forfeited account.

208. No company shall purchase its own shares unless the buy-back is of less than 25% of the
___________.
a. Total paid up capital of the company.
b. Total paid up capital and reserves of the company.
c. Total paid up capital and free reserves of the company.
d. Total nominal capital and free reserves of the company.

209. Buyback of equity shares in any financial year shall not 25% of its ________________.
a) Total paid up equity capital in that financial year
b) Total paid up capital.
c) Total paid up equity capital and free reserves of the company.
d) Total nominal capital and free reserves of the company.

210. On buy-back of shares, there is reduction in the share capital to the extent of
____________.
a) Market value of the shares bought back.
b) Face value of the shares bought back.
c) Called up value of the shares bought back.
d) Un paid value of the shares bought back.

211. A buyback of 10% of the total paid up equity capital and reserves of the
company__________.
a) Can be authorized by the shareholder, but no special resolution need to be passed for the
same.
b) Can be authorised by the board, but a special resolution with need to be passed in a general
meeting to ratify the same.
c) Can be authorised by the board, but a special resolution with need be passed unanimously
by all members present to ratify the same.
d) Can be authorised by the board, and no special resolution need to be passed in general
meeting.

212. The buyback of equity shares in any financial year shall not exceed 25% of its total
________________.
a) Authorised capital in that financial year.
b) Paid up equity capital in that financial year.
c) Paid up capital and free reserves in that financial year.
d) Called up capital in that financial year.
Answers:-

163 a 188 b
164 c 189 a
165 b 190 a
166 b 191 b
167 c 192 d
168 d 193 c
169 d 194 c
170 d 195 a
171 d 196 a
172 d 197 a
173 a 198 d
174 c 199 d
175 a 200 d
176 b 201 a
177 d 202 d
178 c 203 d
179 b 204 d
180 a 205 d
181 b 206 d
182 c 207 a
183 d 208 c
184 c 209 a
185 d 210 d
186 d 211 b
187 d 212 a
 4. Investment Accounting (AS-13)
213. Investment intended to be held for less than 12 months is called _______
investment
a) Annual
b) Current
c) Long term
d) Trade

214. Fixed return bearing investment are _________

a) Equity shares
b) Debentures
c) Jewellery
d) Machinery

215. Accounting for Investments deal with by _______.

a) AS 9
b) AS 13
c) AS 11
d) AS 29

216. Rights shares are offered in ratio of __________.

a) Number of shares held
b) Face value of shares
c) Cost of shares
d) Paid up value of shares

217. The cost of investment sold is to be calculated as per _________method

a) FIFO
b) LIFO
c) Weighted Average
d) Simple Average

218. The interest up to the transactions is paid in addition to the price in case of
__________quotation.
a) cum-interest
b) ex-interest
c) fixed price
d) variable price

219. The interest in bonds is to be calculated on ___________.

a) cost
b) face value
c) number of bonds
 d) market value

220. The carrying amount of current investment is to be shown at __________.

a) face value
b) cost
c) market value
d) lower of cost or market value

221. Each side of Investments Account have _________column of amount.

a) 2
b) 3
c) 4
d) 1

222. The carrying amount of long term investment is to shown at _________.

a) cost
b) face value
c) market value
d) paid up value

223. On 1st July 2018 Jayshree Ltd. purchased 100 of its own 12% debentures for
price of Rs. 9,900 which is cum interest price. Interest is paid on 30 th September and
31st March every year. The acquisition cost of 100 debentures is ________.
a) Rs. 9,600
b) Rs. 9,700
c) Rs. 10,300
d) Rs. 10,000

224. Rajshree Ltd. hold 14% debentures of the face value of Rs. 5,000 in RJ Ltd.
Interest is payable on 30th June and 31st December every year. The debentures were
purchased on 1st July 2018. Accounts are closed on 31st March every year. The
accrued interest on 31st March 2019 was_________.
a) Rs.175
b) Rs.525
c) Rs.325
d) Rs.350

225. Y Ltd. purchased 1,000 shares @ Rs. 120 each and paid brokerage @ 2%. The
cost of acquisition is _________.
a) Rs. 1,20,000
b) Rs. 2,400
c) Rs. 1,22,400
d) Rs. 1,25,000
226. Z Ltd. purchased 10,000 shares of Rs. 10 each at Rs. 25 per share of A Ltd.
during the year 2012-13. During the year 2016-17, A Ltd. offered rights issue at one
share for every two shares held at a price of Rs. 20 per share. Right shares were
subscribed. The carrying cost of investment is ___________.
a) Rs. 2,50,000
b) Rs. 1,00,000
c) Rs. 2,50,000
d) Rs. 3,50,000

227. The receipt of bonus shares is to be shown in _________ column of

Investment.
a) no. of shares
b) cost price
c) market price
d) no. of bands

228. The value of shares allotted on conversion of debentures is credited in

_________.
a) capital account
b) profit & loss account
c) investment
d) debentures

229. Mr. A purchased 10,000 shares of X Ltd. @ 80 each and paid brokerage @
1.5% and stamp duty Rs. 8,000. So cost of acquisition of shares will be
____________.
a) Rs. 8,00,000
b) Rs. 7,80,000
c) Rs. 7,88,000
d) Rs. 8,20,000

230. Investment in immovable properties shown under _____________.

a) fixed asset
b) current asset
c) current investment
d) long-term investment

231. Mr. A purchased 15,000 shares of X Ltd. @ 96 each and paid brokerage @
1.5% and stamp duty Rs. 14,400. So cost of acquisition of shares will be
________________.
a) Rs. 14,40,000
b) Rs. 14,61,600
c) Rs. 14,76,000
d) Rs. 14,04,000
232. When bonus shares are received __________.
a) Nominal value is entered in nominal value column of Investment Account
b) cost is entered in cost column of investment account
c) ignored
d) Nominal value is entered in cost column of Investment Account

233. Dividend is paid to the holder of shares on date of____________.

a) current
b) actual
c) book closure
d) declaration

234. T Ltd. has current investment. The following data of current investment are
given below:-

Cost Market Value on 31-3-2019

Current Investment 1,50,000 1,55,000
Number of shares 15,000 ----
Number of shares sold -- 3,000

The Closing value of shares as on 31-3-2019 was ____________.

a) Rs. 1,87,500
b) Rs. 1,55,000
c) Rs. 1,50,000
d) Rs. 1,20,000

235. S Ltd. has current investment. The following data of current investment are
given below:-

Cost Market Value on 31-3-2020

Current Investment 1,20,000 90,000
Number of shares 12,000 ----
Number of shares sold -- 2,000

The Closing value of shares as on 31-3-2020 was ____________.

a) Rs. 1,00,000
b) Rs. 90,000
c) Rs. 1,87,500
d) Rs. 1,87,500

236. Interest is always calculated on the ______________.

a) M.V. of the security
 b) Face value of the security
c) Cost of the security
d) Realisable value of the security

237. On sale of investment Profit or Loss is calculated by equation___________.

a) Sale less average cost
b) Sale less weighted average cost
c) Sale less cost as per FIFO basis
d) Sale less cost as per LIFO basis

238. Profit on sale of investment is transferred to ____________.

a) Profit and Loss Account
b) Investment Account
c) Capital reserve Account
d) Trading Account

239. Dividend on shares accrues on the _____________.

a) due date
b) date of declaration
c) date fixed in advance
d) last day of the year

240. Issue of bonus shares is entered in _____________.

a) N.V. column on debit side of Investment Account
b) Cost column on debit side of Investment Account
c) N.V. column on credit side of Investment Account
d) Cost column on credit side of Investment Account

241. Right shares subscribed are entered in ___________.

a) N.V.column (Dr.) cost is entered in capital column debit side of Investment
Account
b) N.V. column (Cr.) cost in cost column credit side of Investment Account
c) Cost is entered in capital column on debit side of Investment Account
d) Cost is entered in capital column on credit side of Investment Account

242. Sale of rights shares is entered in investment Account on ___________.

a) Debit side of Investment Account in cost column
b) Debit side of Investment Account in N.V. column
c) Entered in Investment Account
d) Sale proceeds credited to Profit and Loss Account

243. Cost of acquisition of debentures in the case of cum interest price is _______.
a) cum interest price - interest for expired period
b) cum interest price + interest for expired period
 c) cum interest price only
d) ex interest price only

244. Loss on sale of investment is __________.

a) Weg. Avg. Cost of investment - Net sales
b) Weg. Avg. Cost of investment + Net sales
c) Simple average cost of investment - Net sales
d) Cost of investment - Net sales

245. Loss on sale of investment is __________.

a) debited to Investment Account
b) debited to Profit and Loss Account
c) credited to Profit and Loss Account
d) debited to Reserve Account

246. Profit on sale of investment is ___________.

a) credited to Investment Account
b) debited to Profit and Loss Account
c) credited to Profit and Loss account
d) debited to Reserve account

247. X purchased 2,000 equity shares of Y Ltd. at cost of Rs. 125 per share on 1 st
March 2019. These shares are held as current investment. On 31 st March 2019 M.V.
of shares was Rs. 115 per share. The carrying amount of investment is __
a) Rs. 2,50,000
b) Rs. 2,30,000
c) Rs. 4,80,000
d) Rs. 2,00,000

248. On sale of equity shares the equity shares A/c is credited by__________.
a) Cost price
b) Net selling price
c) Market value
d) Nominal value

249. Following is not a Fixed Income Bearing Security__________.

a) Debentures
b) Equity Shares
c) Preference Shares
d) Government Security

250. Interest on bonds accrues __________.

a) on the last day of the financial year
b) on due dates fixed in advance
 c) on the date fixed by board resolution
d) as declared by the company in beginning of every financial year

251. Interest is paid _____________.

a) to the holder of the security on the due date prorata as per his actual period of
holding
b) to the original investor if the security is sold cum-interest
c) to the holder of the security on the due date irrespective of his actual period of
holding
d) to the original investor if the security is sold ex-interest

252. If market value of investment held as current asset is less than cost
_________.
a) difference is credited to profit and loss account
b) difference is debited to profit and loss account
c) difference is ignored
d) difference is debited to capital reserve account

253. If market value of investment held as long term asset is less than cost ______.
a) difference is credited to profit and loss account
b) difference is debited to profit and loss account
c) difference is ignored
d) difference is debited to capital reserve account

254. Dividend is paid ______________.

a) to the holder of the shares on the date of book-closure prorata as per his actual
period of holding
b) to the original investor if the shares are sold cum-dividend
c) to the holder of the shares on the date of book-closure irrespective of his actual
period of holding
d) to the original investor if the shares are sold ex-dividend

255. Any reduction to market value of current investment from cost, on valuation
date is debited to___________.
a) Revaluation Reserve
b) Profit and Loss Account
c) Capital Reserve
d) General Reserve

256. XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at
Rs.98 (ex-interest) on 1st March 2019 from ABC. Interest @ 12% p.a. is to be paid
half yearly on 30th June and 31st December. Price paid by XYZ towards capital is
___________.
a) Rs. 20,000
 b) Rs. 19,600
c) Rs. 20,200
d) RS. 19,800

257. XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at
Rs.98 (ex-interest) on 1st March 2019 from ABC. Interest @ 12% p.a. is to be paid
half yearly on 30th June and 31st December. Total payment made by XYZ is
__________.
a) Rs. 19,600
b) Rs. 20,200
c) Rs. 20,0 00
d) RS. 19,800

258. XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at
Rs.101 (cum-interest) on 1st March 2019 from ABC. Interest @ 12% p.a. is to be paid
half yearly on 30th June and 31st December. Price paid by XYZ towards capital is
___________.
a) Rs. 19,600
b) Rs. 20,200
c) Rs. 20,000
d) Rs. 19,800

259. XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at
Rs.101 (cum-interest) on 1st March 2019 from ABC. Interest @ 12% p.a. is to be paid
half yearly on 30th June and 31st December. Total payment made by XYZ is
___________.
a) Rs. 19,600
b) Rs. 20,200
c) Rs. 20,000
d) Rs. 19,800

260. XYZ buy debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 98
(ex-interest) on 1st March 2019 from ABC. Interest of Rs. 400 accrued from the last
due date till the date of purchase. In the entry for recording this investment in books
of XYZ ___________________.
a) Rs. 400 will be credited to Interest Account
b) Rs. 400 will be debited to Interest Account
c) Rs. 400 will be debited to Investment Account
d) Rs. 400 will be credited to Investment Account

261. Mr. T purchased 1,000 -10% debentures of Rs. 100 each on 1 st April 2019 at
Rs. 96 cum-interest price, the previous interest date being 31st December 2018. The
cost of investment was ___________.
a) Rs. 93,500
 b) Rs. 1,00,000
c) Rs. 1,02,500
d) Rs. 95,300

262. Mr. F has marketable equity securities as short term investment. The cost and
market value at 31st March 2019 were as follows:-

Securities Cost (In Rs.) M.V. (In Rs.)

Company A-100 shares 2,800 3,400
Company B-100 shares 17,000 15,300
Company C-100 shares 31,500 29,500
TOTAL 51,300 48,200

Value of stock of investment as on 31-03-2019 was ____________.

a) Rs. 47,600
b) Rs. 48,200
c) Rs. 51,300
d) Rs. 3,100

263. The interest due upto date of purchase is segregated from total price of
investment, if price is ___________.
a) Cum-interest
b) Ex-interest
c) Purchase
d) Sale

264. If a security is transferred on 31st March, 2019 being the exact date when
interest falls due ____________________.
a) the entire interest upto 31st March ,2019 belongs to the purchaser
b) the interest upto 30th March, 2019 belongs to the purchaser
c) the entire interest upto 31st March, 2019 belongs to seller
d) the entire interest upto 30th March,2019 belongs to seller

265. A security is transferred on 31st May, 2019; while the next interest fall due on
30th June, 2019_________________.
a) the purchaser has the right to claim the interest upto 31st May, 2019 as his income
b) the seller has the right to claim the interest upto 31st May, 2019 as his income
c) the seller has the right to claim the interest upto 30th June, 2019 as his income
d) interest for June 2019 is divided equally between the seller and the purchaser

266. XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at
Rs.98 (ex-interest) on 1st March 2019 from ABC. Interest @ 12% p.a. is to be paid
 half yearly on 30th June and 31st December. Nominal value of Investment purchased
is__________.
a) Rs. 20,000
b) Rs. 19,600
c) Rs. 20,200
d) Rs. 19,800

267. XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at
Rs.98 (cum-interest) on 1st March 2019 from ABC. Interest @ 12% p.a. is to be paid
half yearly on 30th June and 31st December. Nominal value of Investment purchased
is__________.
a) Rs. 20,000
b) Rs. 19,600
c) Rs. 20,200
d) Rs. 19,800

268. XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at
Rs.98 (ex-interest) on 1st March 2019 from ABC. Interest @ 12% p.a. is to be paid
half yearly on 30th June and 31st December. ABC has the right to claim interest of
__________.
a) Rs. 400
b) Rs. 2,400
c) Rs. 1,200
d) None of the above

269. ABC sells 100 debentures of nominal value of Rs. 100 each of ICICI Ltd. at
Rs.98 (ex-interest) on 1st March 2019 to XYZ. Interest @ 12% p.a. is to be paid half
yearly on 30th June and 31st December. Nominal value of investment sold is
__________.
a) Rs. 10,000
b) Rs. 10,100
c) Rs. 9,800
d) Rs. 9,900

270. ABC sells 100 debentures of nominal value of Rs. 100 each of ICICI Ltd. at
Rs.98 (ex-interest) on 1st March 2019 to XYZ. Interest @ 12% p.a. is to be paid half
yearly on 30th June and 31st December. Amount received towards capital is
___________.
a) Rs. 10,000
b) Rs. 10,100
c) Rs. 9,800
d) Rs. 9,900
 271. ABC sells 100 debentures of nominal value of Rs. 100 each of ICICI Ltd. at
Rs.101 (cum-interest) on 1st March 2019 to XYZ. Interest @ 12% p.a. is to be paid
half yearly on 30th June and 31st December. Amount received towards capital is
___________.
a) Rs. 10,000
b) Rs. 10,100
c) Rs. 9,800
d) Rs. 9,900

272. ABC sells 100 debentures of nominal value of Rs. 100 each of ICICI Ltd. at
Rs.98 (ex-interest) on 1st March 2019 to XYZ. Interest @ 12% p.a. is to be paid half
yearly on 30th June and 31st December. Total amount received is ____________.
a) Rs. 10,000
b) Rs. 10,100
c) Rs. 9,800
d) Rs. 9,900

273. ABC sells 100 debentures of nominal value of Rs. 100 each of ICICI Ltd. at
Rs.101 (cum-interest) on 1st March 2019 to XYZ. Interest @ 12% p.a. is to be paid
half yearly on 30th June and 31st December. Total amount received is ___________.
a) Rs. 10,000
b) Rs. 10,100
c) Rs. 9,800
d) Rs. 9,900

Answers:-

213 b 233 c 253 c

214 b 234 d 254 c
215 b 235 b 255 b
216 a 236 b 256 b
217 c 237 b 257 c
218 b 238 a 258 d
219 b 239 b 259 b
220 d 240 a 260 b
221 b 241 a 261 a
222 a 242 d 262 a
223 a 243 a 263 a
224 a 244 a 264 c
225 c 245 b 265 b
226 d 246 c 266 a
227 a 247 b 267 a
 228 d 248 b 268 a
229 d 249 b 269 a
230 d 250 b 270 c
231 c 251 d 271 d
232 a 252 b 272 a
273 b

5. Ethical Behaviour and Implications for Accounts

274. Obey certain ethical rules no matter what the results are ___________.
a) Ethical relativism
b) Deontological ethics
c) Ethical absolutism
d) Teleological ethics

275. Ethical decisions must consider the consequences_____________.

a) Ethical relativism
b) Deontological ethics
c) Ethical absolutism
d) Teleological ethics

276. Ethics are unchanging over time and place _____________.

a) Ethical relativism
b) Deontological ethics
c) Ethical absolutism
d) Teleological ethics

277. Ethics are between different ages and different communities’ ____________.
a) Ethical relativism
b) Deontological ethics
c) Ethical absolutism
d) Teleological ethics

278. Under the Companies Act. 20113, minimum CSR expenditure must be
incurred by every company_______________.
a) having net worth of Rs. 1,500 crore or more
b) having net worth of Rs. 500 crore or more
c) having net worth of Rs. 1,000 crore or more
d) having net worth of Rs. 5 crore or more

279. Under the Companies Act, 2013 minimum CSR expenditure must be incurred
by every company ________________.
a) having a turnover of Rs.500 crore or more during any financial year
 b) having a turnover of Rs.1,500 crore or more during any financial year
c) having a turnover of Rs.5 crore or more during any financial year
d) having a turnover of Rs.1,000 crore or more during any financial year

280. Under the Companies Act, 2013 minimum CSR expenditure must be incurred
by every company ________________.
a) having a net profit of Rs. 500 crore or more
b) having a net profit of Rs. 1,000 crore or more
c) having a net profit of Rs. 100 crore or more
d) having a net profit of Rs. 5 crore or more

281. Under the Companies Act, 2013 every company must spend in every financial
year _________________.
a) at the most 2% of the average net profits of the company made during the 3
immediately preceding financial years
b) at least 3% of the average net profits of the company made during the 3
immediately preceding financial years
c) at least 3% of the average net profits of the company made during the 2
immediately preceding financial years
d) at least 2% of the average net profits of the company made during the 3
immediately preceding financial years

282. The ____________stage in Ethical Education is concerned with Ethical

Sensitivity.
a) 1st
b) 2nd
c) 3rd
d) 4th

283. Business Responsibility Reporting is mandatory ______________.

a) under the Companies Act, 2013
b) for listed companies under SEBI Regulations
c) under Accounting Standards
d) Under Partnership Act, 1932

284. The IFAC Code has ______________ part (s)

a) One
b) Two
c) Three
d) Five

285. Confidentiality is a ________________.

a) threat to compliance with a fundamental principle
b) fundamental principle
 c) safeguard against threat to compliance with a fundamental principle
d) evaluating significance of threats

286. Due to long or close relationship with a client or employer, a Chartered

Accountant will be too sympathetic to their interests is a _________________.
a) threat to compliance with a fundamental principle
b) fundamental principle
c) safeguard against threat to compliance with a fundamental principle
d) evaluating significance of threats

287. Continuing professional development requirements is a ________________.

a) threat to compliance with a fundamental principle
b) fundamental principle
c) safeguard against threat to compliance with a fundamental principle
d) evaluating significance of threats

288. Whistle blowing is a ____________.

a) threat to compliance with a fundamental principle
b) fundamental principle
c) safeguard in the work environment
d) evaluating significance of threats

289. Ethics education at __________stage instils in accountants fundamental

knowledge on matters concerning professional values, ethics and attitudes.
a) 1st
b) 2nd
c) 3rd
d) 4th

290. Ethics Knowledge is the focus of the _____________stage in Ethics

Education.
a) 1st
b) 2nd
c) 3rd
d) 4th

291. The ___________stage in Ethical Education is concerned with Ethical

judgement.
a) 1st
b) 2nd
c) 3rd
d) 4th
 292. The ____________stage in Ethical Education is concerned with Ethical
behavior.
a) 1st
b) 2nd
c) 3rd
d) 4th

293. The word ‘Ethics’ comes from ______________.

a) Greek
b) Latin
c) Urdu
d) French

294. In India CSR is made mandatory w.e.f._____________.

a) 1-04-2013
b) 1-12-2014
c) 1-04-2014
d) 1-04-2018

295. CSR obligations the penalty is not less than_____________.

a) Rs.20,000
b) Rs. 30,000
c) Rs. 50,000
d) Rs. 75,000

296. CSR is governed by section___________ of Companies Act 2013.

a) 135
b) 198
c) 123
d) 125

297. Ethical behavior should be practiced with ____________.

a) Customers
b) Shareholders
c) Suppliers
d) Stakeholders

298. Donating time towards a community is a ______________.

a) Ethical responsibility
b) Legal responsibility
c) Economic responsibility
d) Philanthropic responsibility

Answers:-
274 b 284 c 294 c
275 d 285 b 295 c
276 c 286 a 296 a
277 a 287 c 297 d
278 b 288 c 298 d
279 d 289 a
280 d 290 a
281 d 291 c
282 b 292 d
283 b 293 a