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by Kumar Nirmal Prasad on May 17, 2015 in Corporate Accounting Multiple Choice Questions and Answers, Multiple Choice Subscribe

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CORPORATE ACCOUNTING MULTIPLE CHOICE QUESTIONS AND ANSWERS S E A R C H T H I S WE B S I T E

Corporate accounting multiple choice questions asked in 2004 to 2018 exam
Fill in the Blanks:
a) Share application account is a personal Account.
b) Dividend declared between two annual general meetings is known as Interim Dividend.
c) Reduction of capital is unlawful except when sanctioned by the court under sec.61.
d) Pre-acquisition Pro ts are treated as capital Pro t.
e) The minimum Share Application money is 5% of the face value of shares.
f) Accounting for Amalgamation is done as per Accounting Standard 14.
g) Consolidated Financial Statements are prepared as per Accounting Standard 21.
h) The portion of the authorized capital which can be called up only on the liquidation of the company is
called Reserve capital.
i) A debenture holder is the creditor of a company.
j) Section 2(87) of the Companies Act, 2013 de nes a subsidiary company.
k) Public Ltd. Companies cannot issue deferred shares. (Equity/Preference/Deferred).
l) Preference Shares can be redeemed if they are fully paid up. FEATURED POST AHSEC SOLVE
m) In case of holding company shares held by outsiders are known as Minority Interest. SUBSCRIBE OUR YOUTUBE CHANNEL FOR M
n) Internal reconstruction means reduction of a share capital of a company which is to be reconstructed. VIDEOS (AHSEC, DIBRUGARH AND GAUHAT
o) If shares are forfeited, share capital account is debited with the amount of called up value of shares. UNIVERSITY)
FOLLOW OUR YOUTUBE CHANNEL FOR
p) Reserve capital is a part of authorised capital.
OF VIDEOS FOR ASSAM AHSEC CLASS 12
q) A company can declare and distribute dividend even if its Memorandum and Articles are silent. STUDENTS

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r) Reduction of share capital is unlawful except when sanctioned by the court.

s) Pro t of the subsidiary company made after the date of the purchase of shares by the holding company
is treated as revenue pro ts.
t) Public Ltd. Companies cannot issue deferred shares.
u) Assets of the company cannot be mortgaged in favour of Shareholders.
v) Companies have a statutory obligation to prepare Final Accounts as required by Section 129 of the
Companies Act, 2013.
w) A wholly owned subsidiary company is one in which all the shares with voting rights of subsidiary
company are owned by the holding company.

State the following statements whether ‘true’ or ‘false’

CORPORATE ACCOUNTING SOLVED QUESTION PAPERS (2010 TO 2018)
2010 2011 2012 2013 2014 2015
2015(OLD) 2016 2016(OLD) 2017 2017(OLD) 2018
2018(OLD)
 CORPORATE ACCOUNTING IMPORTANT QUESTIONS FOR UPCOMING EXAM
CORPORATE ACCOUNTING MULTIPLE CHOICE QUESTIONS AND ANSWERS

1) External Reconstruction means reduction of share capital of a company which is to be

reconstructed.  False
2) Consolidated Financial Statements are prepared as per Accounting Standard 21.     True
3) Out of the face value of the share at the least 10% is payable with application.    False
4) Debenture holders with be entitled on their debentures interest even if there is loss to a
company.     True
5) Minority interest= Paid-up value of shares held by outsider.          False
SOLVED PAPERS DIBRUGARH U
6) The director of the company must be a shareholder. False as per Companies Act, 2013
 ADVANCED FINANCIAL ACCOUNTING SOLVE
7) Capital reserve is utilised to meet capital losses.                  True
8) Pre-acquisition pro ts are treated as revenue pro t.            False  AUDITING SOLVED PAPERS

9) Preference share cannot be redeemed unless they are fully paid up.         True  BASICS OF ACADEMIC PROJECT PREPARATIO
10) For amalgamation, two or more companies are required to amalgamate themselves.  True QUESTION PAPERS

11) Pro ts made by subsidiary company after the date of acquisition of shares by the holding company are  BUSINESS COMMUNICATION II SOLVED PAPE
treated as revenue pro ts.                         True
 BUSINESS ECONOMICS SOLVED PAPERS
12) A debenture holder is an owner of the company.                     False
 BUSINESS ENVIRONMENT SOLVED PAPERS
13) Under net payment method purchase consideration is calculated by adding the various payments made
by the purchasing company.              False  COMPANY LAW SOLVED QUESTION PAPERS

14) Loss on issue of Debenture Account or debenture discount is a capital loss, not asset.     True  CORPORATE ACCOUNTING SOLVED QUESTIO
15) Reduction of Capital is an unlawful except when sanctioned by the Court.         True
 COST ACCOUNTING SOLVED QUESTION PAPE
16) Bonus shares can be issued to the existing members only.   True
 DIRECT TAX LAW II SOLVED PAPERS
17) Dividends cannot be declared except out of pro ts.               True
18) Payments made to debentures holders should be considered as part of purchase consideration.  False  INCOME TAX SOLVED QUESTION PAPERS

19) In a wholly owned subsidiary, there is no minority interest because all the shares with voting rights are  INDIAN BANKING SYSTEM SOLVED PAPERS
held be the subsidiary company.               True
 INDIAN FINANCIAL SYSTEM SOLVED QUESTI
20) Under the Income-tax Act, 1961, companies are required to pay advance tax on their expected pro ts. 
True  PBM SOLVED QUESTION PAPERS

21) Any reduction of capital reduces the security of the creditors.            False  SECURITY ANALYSIS AND PORTFOLIO MANA
SOLVED PAPERS
22) Section 2(67) of the Companies Act, 2013 de nes a subsidiary company.       False, 2(87)
23) Interest on Sinking Fund Investment Account is credited to Pro t and Loss Account.               False,
Sinking Fund A/c
24) A holding company is one that holds the whole of the share capital of another company.      False
Choose the correct answer to the following questions from the given alternatives:
1.       Share allotment Account is
a)      Personal
b)      Real
c)       Nominal
2.       Public Ltd companies cannot issue
a)      Sweet Equity Shares
b)      Deferred Shares
c)       Preference shares
3.       Capital Redemption Reserve is used
a)      For writing of Capital losses
b)      For issuing partly paid bonus share
c)       For issuing fully paid bonus share P OP ULAR P OSTS
4.       Debenture Holders are the
a)      Owner of the company Di erence between Equity Shares and Preference S

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b)      Members of the company Business Economics: Meaning, Nature, Scope and O
c)       Creditors of the company
5.       Call-in-arrear is shown
a)      Under the head current liabilities AHSEC Class 12: Accountancy Solved Question Pap
b)      By deducting from the called up capital
c)       Under the head current liabilities IGNOU SOLVED ASSIGNMENT: BSHF - 101 (2014-15
6.       Internal reconstruction means
a)      Amalgamation in nature of merger Dibrugarh University (3rd Semester) - Business Sta
b)      Absorption Important Questions and Answers for Nov' 2019 Ex
c)       Capital Reduction
7.       Post-acquisition Pro t is
a)      Capital Pro t AHSEC Class 12: Accountancy Solved Question Pap
b)      Revenue Pro t
c)       Super Pro t IGNOU SOLVED ASSIGNMENT: ECO - 02 (2014-15)
8.       Pre-acquisition pro t is
a)      Capital Pro t Dibrugarh University (4th Semester) - Cost Accoun
b)      Revenue Pro t Important Questions and Answers
c)       Super Pro t
9.       The maximum allowable discount on Equity shares is
a)      10%
T O T A L P A G E V I E WS
b)      8%
c)       5%
10.   Dividend is usually paid on
a)      Called-up-capital 1 6 1 2 5 1 9 7
b)      Nominal capital
c)       Paid-up-capital 11 Online Users
11.   As per the SEBI’s guidelines the minimum application money shall not be less than
a)      25% of issue price
b)      10% of the issue price SEARCH BLOG
c)       6% of the issue price
12.   Consolidated Financial Statements are prepared as per Accounting Standard
a)      19
b)      21
c)       23
BLOG AR CHIVE
13.   Capital Redemption Reserve Account can be Utilized for
a)      Writing o past losses
b)      Writing o capital losses May (24)
c)       Issuing fully paid bonus shares
14.   A company ________ its own debentures
a)      Can re-buy
b)      Cannot re-buy
c)       Can partly buy
15.   Under sections 61 of the Companies Act, 2013, company shall given notice of the alteration of its share capital
to the nancial health of business.
a)      15
b)      2
c)       30
16.   No call on the share shall exceed
a)      1/4th of the nominal value
b)      1/5th of the nominal value
c)       None of the above
17.   Debentures which are transferable by mere delivery are
a)      Registered Debentures
b)      Naked Debentures
c)       None of the above
18.   Investment in Subsidiary Company should be accounted for in accordance with
a)      As-13
b)      As-21
c)       None of these
19.   Goodwill arising on amalgamation is to be amortised:
a)      Within 5 years
b)      Within 5 years unless a longer period is justi ed
c)       None of these
20.   The credit balance of pro t & Loss appropriation account in case of company is to be transferred to
a)      Capital Account
b)      Current Account
c)       None of these
21.   Called up capital includes
a)      Discount of issue of shares
b)      Securities premium
c)       None of these
22.   Redeemable preference shares are redeemable
a)      Within 20 years
b)      Within 7 years
c)       None of above
23.   Dividend declared in General Meeting
a)      Can exceed the amount recommended by the board
b)      Cannot exceed the amount recommended by the board
c)       None of the above
24.   When two or more companies are liquidated and a new company is formed, it is called (AMALGAMATION)
a)      Absorption
b)      External Re-construction

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c)       Internal Re-construction
d)      None of above
25.   Sinking Funds is shown in the Balance Sheet under the heading
a)      Reserve and surplus
b)      Securities Loan
c)       None of the above
26.   As per Income tax Act, Preliminary Expenses may be written o
a)      Over 5 years
b)      Over 10 years
c)       None of the above
27.   The provision for minimum subscription of 90% will not apply when shares are
a)      O ered to public
b)      Sold through private placement
c)       Issue as right share
28.   Pricing of public issue is determine by
a)      The SEBI
b)      The company consultation with stock exchange and SEBI
c)       The company consultation with legal manager
29.   Proceeds in connection with issue of shares at discount would mean
a)      Only the net amount received
b)      Face value of share issued
c)       None of the above
30.   Proceeds in connection with issue of shares at a premium would mean
a)      Only the net amount received
b)      Face value of share issued
c)       None of the above
31.   A trust shall be executed by the issuer company in favour of the debenture trustees within
a)      Six month of the closure of the issue
b)      Twelve month of the closure of the issue
c)       Six month from the date of issue
32.   Under polling of interest method, all cost associated with amalgamation are:
a)      Capitalised
b)      Expenses as incurred
c)       None of the above
33.   The company must pass
a)      A member’s resolution to reduce the share capital
b)      An ordinary resolution to reduce the share capital  
c)       A special resolution to reduce the share capital
34.   Corporate Dividend Tax will be shown in the P/L account as
a)      A charge against pro t
b)      An appropriation of pro t
c)       None of the above
35.   Premium on redemption of debenture account is:
a)      A real Account
b)      A nominal Account
c)       A personal Account
36.   When Share are issued to promoters for the services o ered by them, it is debited to
a)      Preliminary Exp. Account
b)      Goodwill account
c)       Share Capital Account
37.   The excess price received over the Par Value of Shares should be credited to
a)      Call-in Advance Account
b)      Reserve Capital account
c)       Securities premium Account
38.   A xed charge generally covers all the
a)      Fixed assets of the company including future one
b)      Current assets of the company including future one
c)       Speci c assets of the company
39.   A oating charge generally covers all the
a)      Fixed assets of the company including future one
b)      Current assets of the company including future one
c)       All  assets of the company including future one
40.   The di erent between Purchase consideration and Share Capital of the transferor company is adjusted again:
a)      Realisation Account
b)      Reserve Account
c)       Goodwill account
41.   The ‘ nancial year’ of the Company may be less or more than a Calendar year but it shall not exceed:
a)      Twelve months
b)      Eighteen months
c)       Fifteen months
42.   A share represents
a)      An interest in the company
b)      Assets of the company
c)       Liabilities of the company
43.   Minority interest is calculated at the date of
a)      Consolidated Balance Sheet
b)      Taking control of Subsidiary Company
c)       Closure of accounting year
44.   Interest on calls in arrear should not exceed
a)      10%
b)      6%
c)       7%

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45.   A company can issue shares at a discount under Section
a)      77
b)      78
c)       53
46.   A company can issue shares at a discount under Section
a)      77
b)      52
c)       79
47.   Pro t on re-issue of forfeited shares is transferred to:
a)      Revenue reserve
b)      General reserve
c)       Capital Reserve
48.   Account for amalgamation is associated with Accounting standard:
a)      14
b)      15
c)       16
49.   Preference shareholder are
a)      Creditors of a company
b)      owner of the company
c)       customers of the company
50.   Debentures and shares are show in the Balance sheet at
a)      Face value
b)      Discount
c)       Premium
51.   Accumulated losses to the vendor company should be transferred to the
a)      Pro t and Loss Account
b)      Pro t and Loss Appropriation Account
c)       Equity shareholder Account
52.   Consolidated Financial Statements are prepared as per Accounting Standard
a)      19
b)      21
c)       23
53.   Under Section 61 of the Companies Act, 1956 a company shall give notice of the alteration of its share capital
to the Registrar within _____ days of doing so.
a)      15
b)      25
c)       30
54.   Share Forfeited Account is shown on the liabilities side of the Balance Sheet.
a)      by adding to the paid-up capital
b)      under the head Reserves & Surplus
c)       Under the head Current Liabilities and Provisions
55.   Rate of interest on Calls-in advanced not exceed
a)      12% per premium
b)      5% per premium
c)       10% per premium
56.   Fixed deposits are shown as on the liabilities side of the Balance Sheet
a)      Under the head current Liabilities
b)      Under the head Secured Loan
c)       Under the heads provisions
d)      Under the head unsecured loan, Non-current liabilities
57.   Goodwill is
a)      Intangible assets
b)      Fictitious assets
c)       None of the above

Tags # Corporate Accounting Multiple Choice Questions and Answers # Multiple Choice Questions and Answers
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