Higher financial accounting MCQ with solutions

 Higher financial accounting MCQ with solution

MCQ solutions Video:

1. Share allotment account is a ------------------.

A. personal account

B. Real account

C. Nominal account

D. Impersonal account

Ans: A

2. Holders of preference shares will have a right to vote if the dividend remains in arrears for a 

period not lessthan

A. 2 year

B. 3 years

C. 6 years

D. none of thes

Ans:A

3. The minimum share Application money is -----------.

A. 5% of the face value of shares

B. 10% of the issue price of shares

C. Re. 1 per share

D. 15% of the face value of shares

Ans: a

4. Premium received on issue of shares is shown on-----------.

A. asset side of the balance sheet

B. liability side of the balance sheet

C. credit side of the P&L a/c.

D. debit side of the P & L a/c

Ans:B

5. Premium on issue of shares can be used for -----------.

A. distribution of dividend

B. writing of capital losses

C. transferring to general reserve

D. paying fees to directors

Ans:b

6. Premium received on issue of shares cannot be utilised for

---------.

A. for the issue of bonus shares

B. for writing of preliminary expenses

C. for providing premium payable on redemption

D. for distribution of dividend

Ans:d

7.Section -----------of companies act 1956 deals with the scheme of stock invest

A. 69 to 70

B. 69 to 71

C. 69 to 72

D. 69 to 73

Ans:d

8. When shares issued at premium which of the following account is credited?

A. Share premium account

B. Share first call account

C. Share allotment account

D. Share forfeited account

Ans:a

9. Minimum number of members in case of public company is---------.

A. 4

B. 5

C. 6

D. 7

Ans:d

10. Maximum number of members in public limited company is ---------------.

A. 10

B. 20

C. 50

D. unlimited

Ans:d

11. After getting minimum subscription of shares, the company has to allot shares with in---------

------days.

A. 90

B. 100

C. 110

D. 120

Ans:d

12. If the minimum subscription is not received by the company, then the refund of application

money should be made within ----------days.

A. 7

B. 9

C. 10

D. 22

Ans:c

13. In case of public limited company, after getting the-----------the company can start the business 

A. Memorandum of Association

B. Table A

C. Certificate of commencement of business

D. Articles of Association

Ans:c

14. If Company A purchases the majority shares of Company B, what combination would this be

referred to?

A. Amalgamation

B. Takeover

C. Absorption

D. None of the above

15. When two or more companies carrying on similar business decide to combine, a new

company is formed, it is known as ..................

(A)Amalgamation

(B)Absorption

(C)Internal reconstruction

(D)External reconstruction

16. When one of the existing companies take over business of another company or companies, it

is known as ...........

(A)Amalgamation

(B)Absorption

(C)Internal reconstruction

(D)External reconstruction

17. While calculating purchase price, the following values of assets are considered

(A)Book value

(B)New values fixed

(C)Average values

(D)Market values

18. Shares received from the new company are recorded at -

(A)Face value

(B)Average price

(C)Market value

(D)None of the above

19. Which of the following statement is correct?

(A)The amount of Goodwill or Capital Reserve is found out in the books of purchasing

company only

(B)The amount of Goodwill or Capital Reserve is found out in the books of vendor company

only.

(C)Goodwill = Net Assets –Purchase price

(D)The face value of shares of purchasing company will be taken in to account while calculating

purchase consideration.

20. If the two companies have different accounting policies in respect of the same item, then they

make necessary changes to adopt.............. Accounting policies.

(A)Lifo method

(B)Fifo method

(C)Weighted method

(D)Uniform