1. The company formed by the special Act of legistures of parliament is known as
a) Public Company
b) registered company
c) statutory company
d) chartered company
2. What is the minimum required paid up capital of a public company
a) 10 lakhs
b) 5 lakhs
c) 15 lakhs
d) 25 lakhs
3. What is the minimum required paid up capital of a private company
a) 1 lakhs
b) 5 lakhs
c) 15 lakhs
d) 2 lakhs
4. What is the minimum number of members to form a private company?
a) 7
b) 2
c) 5
d) 10
5. What is the minimum number of members to form a public company?
a) 7
b) 2
c) 5
d) 10
6. A private company cannot
a) issue shares
b) invite public to subscribe shares
c) be a manufacturing company
d) be a limited company
7. The amount of capital with which the company intends to get registered is known as
a) issued capital
b) subscribed capital
c) called-up capital
d) authorized capital
8. 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 share
c) A shareholder is the agent of the company
d) Same person can agent and creditor of the company
9. Which of the following are the characteristics of a company
a) Liability of the members is limited up to the face value of shares held by them
b) It is a voluntary association of persons
c) A company is a separate body can sue and be sued in its own name
d) Perpetual succession
10. As per section 77A (1) of the companies act,1956, a company can buy back its own shares out of:
a) Reserves which are available for distribution as dividend
b) Securities premium account
c) Proceeds of fresh issue of shares or other specified securities
d) All of the above
11. Share application and allotment account is a:
a) Personal account
b) Real account
c) Nominal account
d) None of the above
12. Securities premium account is shown on the liabilities side of the balance sheet under the head:
a) Share capital
b) Reserves and surplus
c) Current liabilities
d) Non-Current liabilities
13. As per section 78 of the companies act, amount collected as premium on securities cannot be 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 it’s own shares
14. The portion of the authorised capital which can be called-up only on the liquidation of the company is called
a) Authorised capital
b) Called up capital
c) Issued capital
d) Reserve capital
15. Which of the following statement is false:
a) Buy back must be authorised by articles of company
b) A special resolution must be passed for buy back
c) Shares can be partly paid up
d) The ratio of debt owed by the company is not more than twice the capital and its free reserves after such buy back
16. If shares are bought back out of free reserves then a sum equal to nominal value of the shares so bought back is transferred to:
a) Capital reserve account
b) Capital redemption reserve account (CRR)
c) General reserve account
d) Statutory reserve account
17. Maximum buy back limit in any year is ______ of total paid up equity capital and free reserves.
a) 25%
b) 10%
c) 20%
d) No limit
18. 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
19. 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
20. Which of the following reserves which can be utilised to make partly paid shares into fully paid up:
a) Securities premium
b) Capital redemption reserve
c) PSurplus arising from a change in the method of charging depreciation
d) Capital reserve from sale of fixed assets in cash
21. 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
22. 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
23. 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
24. Which of the following can be utilized for the redemption of preference shares of a company out of profit:
a) Shares forfeited account
b) Development rebate reserve account
c) Capital redemption reserve account
d) Dividend equalization reserve
25. Which of the following cannot be utilized for the redemption of preference shares of a company
a) Securities premium on fresh issue of shares
b) General Reserve
c) Profit and Loss Account
d) Dividend equalization reserve
26. A company cannot issue redeemable preference shares for a period exceeding _____________.
a) 6 years
b) 7 years
c) 20 years
d) 8 years
27. Which of the following cannot be used for the purpose of creation of capital redemption reserve account?
a) Profit and loss account (credit balance)
b) General reserve account
c) Dividend equalization reserve account
d) Unclaimed dividends account
28. 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
29. 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
30. According to sec. 100(1)(c) of the companies act, a company can pay back share capital which 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
31. 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
32. Share capital suspense account is opened when:
a) Balance sheet is not tallied
b) When dividend is declared but not paid
c) When application money is received but balance sheet is prepared before allotment of shares
d) When shares are forfeited
33. 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 that 50%
b) Prospectus contains justification for issue price
c) The issue price is made applicable to all new investors uniformly
d) All of the above
34. 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
35. Which of the following statements are incorrect ?
a) A company registered in india issues only Equity and Preference shares
b) The preference share is that part of share capital which enjoys preferential rights regarding repayment of Capital and payment of Dividend
c) A Public limited company can commence business as soon as it is incorporated
d) A private company can commence business after getting the certificate of incorporation
36. In case of shares under writing commission will be
a) 2%
b) 5%
c) 3%
d) None of these
37. In case of debentures underwriting commission will be
a) 2.5%
b) 4%
c) 3%
d) 5%
38. If company wants to place shares to brokers they should give a maximum of ___________ as brokerage commission.
a) 3%
b) 2%
c) 1.5%
d) None of these
39. Profit and Loss Account shows the:
a) Total Capital Employed
b) Profit and Loss through sale of assets
c) Profit earned by business
d) None of these
40. For a company, retained earnings represent:
a) Contributed capital from shareholders
b) Profits retained by the company before tax is paid to the government
c) Net cash retained by the company before any payment of dividends to shareholders
d) Profits retained by the company after payment of dividends and after any transfer to and from reserves
41. The underwriting account is a ……………… Account
a) Real Account
b) nominal account
c) personal account
d) none of the above
42. The commission due to sub-underwriter will ……………… to the underwriting account.
a) be Debited
b) be Credited
c) Not be shown
d) none of the above
43. When 2 or more agencies or underwriters jointly underwrite an issue of securities, it is known as
a) firm underwriting
b) sub-underwriting
c) syndicate underwriting
d) complete underwriting
44. The term ‘Financial Statement’ covers
a) Profit & Loss Statement
b) Balance sheet and Profit & Loss Statement appropriation account
c) Profit & Loss Statement and Balance sheet
d) All of above are false
45. The form of balance sheet as per companies Act 2013 is
a) Vertical
b) Horizontal
c) Horizontal and vertical
d) Horizontal or vertical
46. The term current asset doesn’t cover
a) Prepaid expenses
b) Debtors
c) Stock
d) Car
47. The Basis of risk in insurance is
a) liability
b) uncertainty
c) possibility of loss
d) insurance
48. To indemnify means to
a) put back in the same financial position just prior to the loss
b) put aside funds to pay for losses reported but not yet paid
c) transfer risk to someone who has better financial resources and can withstand loss
d) make financial provisions for dealing with potential losses
49. The claim lodged by the business to …………………… on happening the event is known as insurance claim
a) Banking company
b) Insurance company
c) Joint stock company
d) None of these
50. The account prepared to find out the stock as on the date of fire is known as ……………………………… trading accounts.
a) statement
b) memorandum
c) consolidated
d) joint
51. The clause through which the insurance claim due to loss of stock is reduced to the proportion that the policy value is …………………………
a) Total clause
b) minimum clause
c) maximum clause
d) Average clause
52. A set of ……………… is to be followed to file a claim with the insurance company
a) rules
b) policies
c) procedure
d) None of these
53. Insurance claim is a claim ……………………… by the insurance company
a) Lodged
b) Longed
c) Lounged
d) laughed
54. Consequential loss policy is also known as ………………………
a) Loss of cost policy
b) loss of profit policy
c) loss of Operation cost policy
d) loss of operating expenses policy
55. …………………… is prepared to find out the stock as on the date of fire
a) Trading account
b) Profit and loss account
c) manufacturing account
d) memorandum trading account
56. ……………………… is the difference between standard sales and actual sales of dislocated period
a) short sales
b) Total sales
c) gross sales
d) Net sales
57. The turnover during that period in the twelve month immediately before the date of damage which corresponds with the indemnity period is called ………………………………
a) Annual turnover
b) standard turnover
c) total turnover
d) Net turnover
58. Investment made to earn regular income
a) marketable securities
b) fixed investments
c) Trade Investments
d) short term investments
59. The price quoted includes interest
a) cum interest
b) ex-interest
c) excluding interest
d) None of these
60. Ex – dividend quotation ………………………………
a) including dividend
b) excluding dividend
c) excess of dividend
d) cumulative of dividend
61. In respect of government security the price quoted is usually
a) Ex-interest
b) cum interest
c) including interest
d) none of above
62. Short term investments made out of idle cash are called
a) marketable securities
b) fixed investments
c) trade investments
d) none of these
63. Trade investment are investment made for …………… Period
a) long period
b) short period
c) Two years period
d) None of these
64. Ex–interest means ……………………………
a) Inclusive of interest
b) Including interest
c) Excluding interest
d) None of these
65. Cum–interest means ………………………………………
a) Excluding interest
b) Exclusive of interest
c) cumulative interest
d) none of the above
66. Investment made for long period are called ……………………
a) marketable securities
b) Temporary investments
c) Trade investment
d) Short investment
67. ………………… investment made for earning regular income
a) short term investment
b) Trade investment
c) Temporary investment
d) marketable securities
68. Investment in government debentures, bonds etc. come under ………
a) variable income bearing securities
b) Temporary income bearing securities
c) Fixed income bearing securities
d) none of the above
69. A ledger maintained where separate investment account prepared for a particular scrip is known as ………………………
a) investment ledger
b) purchase ledger
c) Sales ledger
d) none of these
70. When bonus share are received the average cost of the existing shares are ……………………………
a) Reduced
b) Increased
c) equal
d) none of these
71. Bonus shares are issued by ……………… free reserves
a) Capitalizing
b) Generalizing
c) equalizing
d) None of these
72. Bonus shares are issued out of ………………………………………………
a) capital reserve
b) free reserve
c) share premium
d) none of these
73. Right shares are issued to ………………… share holders
a) previous
b) existing
c) future
d) None of these
74. Investment account is ……………………… Account
a) Personal
b) Nominal
c) Real
d) Revenue a/c
75. Sale of right is a ………………… receipt in case of right issue
a) Revenue
b) capital
c) deferred revenue
d) none of these
76. Brokerage is ………… in the cost of investment in the books of Purchase of investment
a) Added
b) deducted
c) increased
d) subtracted
77. Interest accrued up to the date of sale of investments added to …………………………… Price.
a) Ex-interest
b) Cum-interest
c) inclusive interest
d) None of these
78. A price which includes the interest for the period for which the seller hold the securities is termed as …………………
a) market price
b) Ex-interest price
c) Cum–interest price
d) none of the above
79. The cost of right share is ……………………………
a) added to the cost of investments
b) no treatment is required
c) Subtracted from the cost of investments
d) None of the above
80. Long term investments are carried at ………………………
a) fair value
b) cost price
c) cost or market price which ever is less
d) market price
81. Cost of investment includes …………
a) purchase cost
b) brokerage paid
c) stamp duty paid
d) All of the above
82. Short term investments are carried at …………………………………
a) Fair price
b) cost price
c) cost or market price which ever is less
d) Market value
83. …………… account is real account
a) Brokerage
b) Stamp duty
c) purchase
d) Investments
84. The claim lodged by the business to insurance company on happening the event
a) Claim
b) insurance claim
c) discharge
d) Loss of claim
85. The account prepared to find out the stock as on the date of fire ………………
a) Trading a/c
b) Stock a/c
c) Memorandum trading a/c
d) loss of stock a/c
86. The insurance claim due to loss of stock is reduced to the proportion that the policy value bears to the value of stock
a) Average clause
b) Minimum clause
c) Maximum clause
d) loss of profit clause
87. The insurance policy is less than the value of stock
a) Double insurance
b) re–insurance
c) under insurance
d) over insurance
88. The insurance indemnifies the insured any loss of profit arising from interruption of the normal activity
a) Loss of profit insurance
b) full insurance
c) total insurance
d) fire insurance
89. The claim lodged by the business to the insurance company on happening the event of loss is called …………………
a) Insurance policy
b) Insurance claim
c) Insurance premium
d) None of these
90. When a fixed asset is destroyed, the loss of such asset on the date of fire can be ascertained from
a) records
b) accountant
c) books of accounts
d) None of these