Corporate Accounting Multiple Choice Questions and Answers pdf

Corporate Accounting Multiple Choice Questions and Answers pdf
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Multiple choice questions of Subject Commerce Topic MCQ on Corporate Accounting with answers pdf ( Corporate Accounting Multiple Choice Questions and Answers Quiz ) for Entrances (Entrance Exam) Conducted by different Central and State Universities are given below.

Corporate Accounting Questions and Answers pdf | Multiple Choice Questions on Shares and Debentures pdf

1. Minimum share capital of public company is

(a) rs. 5,00,000 

(b) rs. 4,00,000

(c) rs. 10,00,000

(d) rs. 1,00.000

Ans. a

2. Securities premium account is shown in the balance sheet under

(a) miscellaneous expenditure

(b) current liabilities

(c) reserves and surplus

(d) None of these

Ans. c

3. The reserve which is created for a particular purpose and which is a charge against revenue is called

(a) revenue reserve 

(b) specific reserve

(c) appropriation

(d) provision

Ans. b

4. Equity shareholders have a right to

(a) vote

(b) 20% dividend

(c) have preference on redemption

(d) All of the above

Ans. a

5. Equity shareholders are . of a company.

(a) bankers 

(b) creditors

(c) debtors

(d) owners

Ans. d

6. A … is an artificial person created by law with perpetual succession and a common seal

(a) company

(b) partnership firm

(c) sole proprietorship

(d) hindu undivided family

Ans. a

8. “Proposed dividend’ is shown in the balance sheet of a company under the head

(a) reserves and surplus

(b) current liabilities 

(c) provisions

(d) other liabilities

Ans. b

9. Which of the following is not a statutory company?

(a) LIC

(b) RBI

(c) SBI

(d) TATA

Ans. d

10. If gain on forfeiture is more than loss on reissue, following account shall be credited by the amount of net gain  

(a) capital reserve

(b) general reserve

(c) capital gain

(d) forfeited shares 

Ans. a

12. A company issued 50,000 shares of rs. 10 each at 20% premium payable as follows : application rs. 3, allotment 5 (including premium) and first and final call rs. 4. A holder of 2,500 shares failed to pay the first and final call. His shares were forfeited. Calculate the amount to be credited to share forfeiture account.

(a) rs. 11,000 

(b) rs. 15,000

(c) rs. 14, 000

(d) None of these

Ans. b

13. X purchased the running business of A for rs. 13,50,000, In place of cash he discharged the purchase consideration by issue of equity shares of rs. 10 each at 10% discount. Find the number of shares to be issued.

(a) 1,20,000 

(b) 1,07,500

(c) 1,00,000

(d) 1,50,000

Ans. d

14. A Ltd forfeited 2,000 equity shares of rs. 10 each issued at a discount of 10%, for non payment of first call of rs. 2 and second call of rs. 3 per share. For recording this forfeiture, calls-in-arrear will be credited by

(a) rs. 4,000

(b) rs. 1,000 

(c) rs. 5,000

(d) rs. 10,000

Ans. d

15. The subscribed share capital of S Ltd is rs. 80,00,000 of rs.100 each. There were no calls-in-arrear till the final call was made. The final call made was paid on 77,500 shares. The calls-in-arrear amounted to rs. 62,500. The final call on share is

(a) rs. 25

(b) rs. 7.80

(c) rs.  20

(d) rs. 62

Ans. a

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16. The maximum amount beyond which a company is not allowed to raise funds, by issue of shares is known as

(a) issued capital 

(b) reserve capital

(c) nominal capital

(d) subscribed capital

Ans. c

17. As per the Companies Act, a company cannot proceed to allot shares unless . . is received.

(a) allotment money

(b) application money

(c) minimum subscription

(d) maximum subscription

Ans. c

18. What is the head of ‘discount on issue of shares’ in balance sheet?

(a) Miscellaneous expenditure to the extent not written off

(b) Reserves and surplus

(c) Share capital

(d) Current liabilities

Ans. a

19. On the forfeiture of shares, share captial will be debited by

(a) paid-up value

(b) called-up value

(c) uncalled capital

(d) Any of these

Ans. b

20. Share of a company can be issued for

(a) cash

(b) settlement of a lilability 

(c) promoter’s services

(d) Any of these

Ans. d

21. Securities premium account will be . at the time of issue of bonus shares,

(a) debited 

(b) credited

(c) Any of these

(d) None of these

Ans. a

22. Shares are issued at premium and premium is received by the company. What will be the treatment of premium on forfeiture?

(a) It will be debited 

(b) It will be credited

(c) No treatment

(d) None of these

Ans. c

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23. Balance amount in the share forfeiture appears in the balance sheet under the head of

(a) secured loans

(b) reserves and surplus

(c) share capital

(d) current liabilities

Ans. c

24. The minimum subscription as prescribed by SEB1 against the entire issue is

(a) 95%

(b) 90% 

(c) 5%

(d) None of these

Ans. b

25. Z Ltd forfeited 2,000 shares of rs.10 each (which were issued at par) held by A on non-payment of call money of rs. 3. The called up value per share is rs. 8. Amount to be debited to share capital account at the time of forfeiture will be

(a) rs. 18,000 

(b) rs. 16.000

(c) rs. 14,000

(d) rs. 12,000

Ans. b

26. Maze Ltd allotted 20,000 shares to the applicants of 28,000 shares on prorata basis. Sapplied for 560 shares. What is the number of shares allotted to him. If application money is rs. 4 per share, what will be his amount adjusted towards further calls?

(a) 600 shares, rs. 1, 200

(b) 840 shares, Nil

(c) 400 shares, rs. 640 

(d) 840 shares, rs. 1,200

Ans. c

27. According to Section 78 of the Companies Act, the amount in the securities premium account cannot be utilised for the purpose of

(a) paying dividends

(b) issuing os fully paid bonus shares

(c) writinig offcommission or discount on issues of shares

(d) writing off preliminary expenses

Ans. a

28. HLidforfelted 500 shares, issued at a discount of rs. 1.At the time of forfeiture, discount on issue of share account will be

(a) debited by rs. 500 

(b) credied by rs. 500

(c) debited by rs. 1,000

(d) credited by rs. 1000

Ans. b

29. Reserve capital means

(a) a part of capital redemption reserve

(b) accumulated profits

(c) a part of capital reserve

(d) a part of subscribed uncalled capital to be called-up in the event of winding up

Ans. d

30. To know the amount of paid up capital, .. should be deducted from share capital.

(a) calls-in-advance

(b) uncalled capital

(c) calls-in-arrears

(d) unsubscribed capital 

Ans. c

31. A purchased a building for ?9,40,000 for which he is paying shares of ? 100 each at 15% discount. How many shares will he give as consideration?

(a) 5,500 

(b) 4,000

(c) 11,059

(d) 3,000

Ans. c

32. Mr X, a holder of 20,000 shares for rs. 10 each has paid rs. 2 on application and rs. 3 on allotment. He did not pay rs. 4 on first call. His shares were forfeited subsequently after first call. These shares were reissued at rs. 7 for rs. 9 paid-up. Capital reserve will be

(a) rs. 80,000 

(b) rs. 10,000

(c) rs. 80,000

(d) rs. 60,000

Ans. d

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33. If a share of rs. 10 on which rs. 7 has been paid is forfeited, it can be reissued at a minimum price of

(a) rs. 4

(b) rs. 3

(c) rs. 1

(d) rs. 5

Ans. b

34. A company issued 50,000 shares of rs. 10 each at 20% premium payable as follows : application rs. 2, allotment rs. 5 (including premium) and first and final call rs. 5. A holder of 2,500 shares failed to pay the first and final call. His shares were forfeited. Calculate the amount to be credited to share forfeiture account

(a) rs. 1,000

(b) rs. 12,500

(c) rs. 4,000

(d) None of these

Ans. b

35. Which statement is issued before the issue of share?

(a) Statement of declaration of issue

(b) Memorandum of Association

(c) Prospectus

(d) All of the above

Ans. c

36. The difference between subscribed capital and called-up capital is called

(a) calls-in-arrears 

(b) calls-in-advance

(c) uncalled capital

(d) None of these

Ans. c

37. The excess price received over the par value of shares, should be credited to

(a) call-in-advance account

(b) share capital account

(c) capital reserve account

(d) securities premium account

Ans. d

38. A purchased a building for 75,40,000 for which he is issuing shares of ? 100 each at 10% discount. How many shares will he give as consideration?

(a) rs. 5,500 

(b) rs. 4,000

(c) rs. 76,000

(d) rs. 3,000

Ans. c

39, Mr X.a bolder of 20,000 shares for rs. 10 each has paid rs. 2 on application and rs. 5 on allotment He did not pay t4 on first call. His shares were forfeited subsequently afver first call Share capital will be debited by

(a) rs.1 80 000

(b) rs.1 00 000

(c) rs. 2 80 000

(d) rs. 1 60 000

Ans. a

40. Rainy Lad alloted 10,000 shares to the applicants of 14,000 shares on prorata basis Sam applied for 840 shares. What is the number of shares alloted to him? If application money is rs. 5 what will be the amount adjusted towards further calls?

(a)600  shares. Rs. 1200

(b) 840 shares, NIL

(c) 600 shares. NIL

(d) 840 shares, rs. 1200

Ans. a

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41. Amount due on call is not received. The shortfall will be debited to

(a) pense account 

(b) calle-in-advance

(c) outstanding

(d) callin-arrears

Ans. d

42. Right shares are issued to

(a) eesting shareholders

(b) holders of convertibie debentures

(c) public

(d) All of the above

Ans. a

43. A company issued 20,000 15% preference shares at the rate of rs. 100 each at 10% premium and 5,00,000 equity shares at the rate of rs. 10 each at 10% premium. What is the net amount of securities premium?

(a)  rs. 4,00 000

(b) rs. 7,00,000

(c) rs. 5,00,000

(d) rs. 6,50,000

Ans.b

44. Share premium is utilised for this purpose

(a) for issue of fully paid bonus shares

(b) tor premium payable on redemption of preference share

(c) for writing off preiminary expenses

(d) Al of the above

Ans. d

45. X purchased the running business of A for rs.12,00,000. In place of cash he discharged the purchase consideration by issue of equity shares of  rs. 10 each at 20% premium. Find the number of shares to be issued.

(a) 1,20,000 

(b) 1,07,500

(c) 1,00,000

(d) 6,000

Ans. c

47. X was allotted 100 shares of e 10 each at a premium of rs. 1. He paid application money and allotment money which in total amounted to rs. 5 (excluding premium) and failed to pay the balance on call money of rs. 5. Find the maximum discount that can be given at the time of reissue of shares

(a) rs. 4 per share 

(b) rs. 5 per share

(c) rs. 2 per share

(d) rs. 6 per share

Ans. b

49. Voluntary return of shares for cancellation by the shareholders is called

(a) surrender of shares

(b) forfeiture of shares

(c) cancellation of shares

(d) distribution of shares

Ans. a

50. ALtd forfeited 5,000 equity shares of rs. 10 each issued at a discount of 10%, for non-payment of first call of rs. 2 and second call of rs. 3 per share. For recording this forfeiture, calls-in-arrear will be credited by

(a) rs. 4,000 

(b) rs. 1,000

(c) rs. 25,000

(d) rs. 10,000

Ans. c

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51. If the issue size is upto? 500 crores, the issued shares should be made fully paid-up within . . of the date of allotment.

(a) 12 months

(b) 10 months 

(c) 6 moriths

(d) 18 months

Ans. a

52. 10,000 equity shares of rs. 10 each were issued to public at a premium of rs. 12 per share. Applications were received for 12,000 shares. Amount of securities premium will be

(a) rs. 1,20,000

(b) rs. 1,24,000

(c) rs. 20,000

(d) rs. 12,000

Ans. a

53. Fancy Ltd issued shares of rs. 100 each at a premium of 25%. Juhi who has 2,000 shares of Fancy Ltd, failed to pay first and final call totaling rs. 5. Premium was taken at the time of allotment by the company. On forfeiture of Juhi’s shares, the amount to be debited to share premium account will be

(a) rs. 5,000

(b)  rs. 10,000

(C) rs. 15,000

(d) Nil

Ans. d

54. A company forfeited 200 equity shares of rs. 100 each issued at premium of 50% (to be paid at the time of allotment) on which the first call money of rs. 30 per share was not received, final call of rs. 20 is yet to be made, These shares were subsequently reissued @ rs. 60 per share at rs. 80 paid up. The amount credited to capital reserve is

(a) rs. 5,000 

(b) rs. 2,000

(c)  rs. 6,000

(d) None of these

Ans. c

55. If a company is not able to refund the excess amount received the time of application within the reasonable time, the company will give them interest @

(a) 5% per annum 

(b) 15% per annum

(c) 7% per annum

(d) 10% per arinum

Ans. b

56. Share allotment account is a

(a) real account

(b) personal account

(c) company account

(d) nominal company account

Ans. b

57. According to Section 78 of the Companies Act, the amount in the securities premium account cannot be utilised for the purpose of

(a) writing off loss on sale of the goods

(b) issue of fully paid bonus shares

(c) writing off commission or discount on issue of shares

(d) writing off preliminary expenses

Ans. a

58. When shares are issued to promoters which account should be debited?

(a) Share capital account

(b) Assets account

(c) Promoters account

(d) Goodwill account

Ans. d

59. A to whom 200 shares of rs. 10 each were allotted at par, paid rs. 3 on allotment and rs. 3 on application but could not pay the first and final call money of 4. His shares were forfeited by directors. The amount to be credited to share forfeited account will be

(a) rs. 500 

(b) rs. 400

(c) rs. 600

(d) rs. 1,200

Ans. d

60. A company invited application for subscription of 5,000 shares. Applications were received for 6,000 shares. The shares were allotted on pro-rata bases. If 180 shares are allotted to Ram, how many shares would have been applied by him?

(a) 180 shares 

(b) 216 shares

(c) 150 shares

(d) 175 shares

Ans. b

61. If vendors are issued fully paid shares of rs. 1,00,000 in consideration of net assets of rs. 1,20,000, the balance of rs. 20,000 will be credited to

(a) goodwill account

(b) capital reserve account

(c) vendor’s account

(d) profit and loss account

Ans. b

62. Generic Ltd acquired assets worth rs. 2,75,000 from H Ltd by issue of share of rs. 10 at a premium of Rs. 10. The number of shares to be issued by Generie Ltd to settle the purchase consideration will be

(a) 6,000 shares 

(b) 7,500 shares

(c) 9,375 shares

(d) 13,750 shares

Ans. d

63. Sanif Ltd reissued 1,000 shares which were forfeited by crediting share forfeiture account by rs. 5,000. These shares were reissued at rs. 8 per share. Face value is? 10 per share, The amount transferred to capital reserve will be

(a) rs. 3,000 

(b) rs. 2,000

(c) rs.1,000

(d) Nil

Ans. a

64. Ekta Ltd has allotted 10,000 shares to the applicants of 16.000 shares on pro-rata basis. The amount payable on application is rs. 4. Fapplied for 2,200 shares. The number of shares allotted and the amount carried forward for adjustment against allotment due from Fis

(a) 1,600 shares rs.1200 

(b) 1.340 shares rs.1,600

(c) 1,320 shares rs. 2,000

(d) 1,375 shares rs. 3,300

Ans. d

65. The rate of interest paid by shareholders on calls-in-arrears as per table A is

(a) 5% per annum 

(b) 6% per annum

(c) 10% per annum

(d) 4% per annum

Ans. c

66. A Ltd acquired, assets worth rs. 24,00,000 from H Ltd by issue of shares of 100 @ premium of 20%. The number of shares issued to settle the purchase consideration will be

(a) 12,000 shares

(b) 15,000 shares

(c) 20,000 shares

(d) 11,250 shares

Ans. c

67. Preference shares can be redeemed only if they are

(a) partly paid up 

(b) fully paid up

(c) None of these

(d) Any of these

Ans. b

68. 10,00,000 preference shares are to be redeemed by issue of 8,000 equity shares @ rs.100 each for rs. 120 each. Capital redemption reserve is to be credited by

(a) rs. 3,00,000

(b) rs. 2,00,000

(c) rs. 4,00,000

(d) rs. 5,00,000

Ans. b

69. Preference shares can be issued for a maximum period of 

(a) 25 years

(b) 20 years

(c) 5 years

(d) Both ‘a’ and b

Ans. b

70. A preference share which carry the right of participating in the surplus left after paying equity dividend is called

(a) convertible preference share

(b) cumulative preference share

(C) participating preference share

(d) All of the above

Ans. c

71. A Ltd had 3,000. 14%, redeemable preference shares of rs. 100 each, fully paid up. The company issued 15,000 equity shares of rs. 10 each at par and 1,000 14%, debentures of rs. 100 each. All amounts were received in full. Consequently, the preference shares were redeemed. The amount to be transferred to capital redemption reserve account will be

(a) Nil 

(b) rs. 1,50,000

(c) rs. 3,00,000

(d) rs. 50,000

Ans. b

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