HIGHER FINANCIAL ACCOUNTING
(HFA)
50 MCQS
UNIT - 1
CHAPTER - 1
INTRODUCTION TO COMPANY ACCOUNTIG
(1) Which is not an essential feature of a Company?
(A) Perpetual Existence
(B) Distinct Legal Entity
(C) Voluntary Association of Persons
(D) Share Capital of 50 Lakhs
(2) Which is not a feature of Company?
(A) Separate Legal Entity
(B) Incorporated Association
(C) Perpetuel existence
(D) No separation between management & ownership
(3) Which statement is not correct?
(A) Company is a voluntary association
(B) Company has a common seal
(C) Company has an independent existence
(D) Company is a natural person
(4) Which of the follawing statements are correct
(i) A minor is not competent to become a member of a Company.
(ii) Firm cannot be treated as member of a Company.
(iii) A Foreigner may become a member of a Company.
(iv) A Partnership Firm cannot hold shares in a Company in the individual names of Partner as Joint holders.
(A) (i) and (ii)
(B) (ii), (iii) and (iv)
(C) (i), (iii) and (iv)
(D) (i), (ii) and (iii)
TYPES OF COMPANIES
(5) A Company of which not less than 51% of the Paid up Share Capital is held by the Central Govermment or State Government or by any one or more of them together is called -
(A) Public Company
(B) Private Company
(C) Statutory Company
(D) Govemment Company
(6) For the floatation of a Public Company atleast - members are required.
(A) 2
(B) 5
(C) 10
(D) 7
(7) Share of a Private Company are not freely transferable.
(A) True
(B) Partly True
(C) False
(D) None
(8) Share of a Public Company are freely transferable.
(A) True
(B) Partly True
(C) False
(D) None
(9) Total number of members of a Private Company can exceed 50.
(A) True
(B) Partly True
(C) False
(D) None
(10) In case of Private Companies shares are not listed in any Stock Exchange.
(A) True
(B) False
(C) Partly true
(D) None
(11) A Company puts restrictions on the transfer of its shares.
(A) Private
(B) Public
(C) Government
(D) Defence sector
(12) A Private Company must be registered with the minimum Paid up Share Capital of-
(A) '50,000
(B) '1 Lakh
(C) '5 Lakhs
(D) '10 Lakhs
(13) A Public Company must be Registered with a minimum Paid up Share Capital of -
(A) '10 Lakhs
(B) '5 Lakhs
(C) '50 Lakhs
(D) '100 Lakhs
(14) The number of members of a Private Limited Company cannot exceed -
(A) 10
(B) 100
(C) 500
(D) 50
(15) The number of members of a Public Limited Company cannot exceed -
(A) 100
(B) 50
(C) 1000
(D) No limit
(16) A Private Company has to provide in it's AOA for -
(A) Prohibiting transfer of its Share
(B) Restricting transfer of its Capital Reserve only
(C) Restricting transfer of its shares
(D) Permitting free transfer of its shares
(17) Which of the following restictlons is not applicable to a Private Limited Company?
(A) Invite application for public deposits
(B) Invite applications for public subscription
(C) Restrict number of members to 50
(D) To open overseas branch / office
(18) dentify the fact which is not carrect-
(i) A Company need not be Registered
(ii) A Company can have a maximum of 50 members
(iii) A Company is not affected by death or insolvency of a member
(iv) A Company's Capital is divided into shares
(A) All
(B) (i) and (ii)
(C) (i) and (iii)
(D) (iii) and (iv)
(19) Which statement is not correct?
(i) A Private Company's Capital cannot exceed 1,00,000.
(ii) A Private Company cannot restrict the right of shareholders to freely transfer their shares
(iii) The Private Company should have more than 50 members
(iv) A Private Company can accept deposits from public in case of emergency
(A) (i) and (iv)
(B) (ii) and (iii)
(C) None of the above
(D) All of the above
(20) A Company incorporated under a special Act formed by the Parliament or the state legislative is known as-
(A) Special Company
(B) Statutory Company
(C) Public Limited Company
(D) Incorporation
INCORPORATION
(21) Registered Companies are formed under the-
(A) Companies Act
(B) Partnership Act
(C) Act Passed by the Parliament
(D) Society Registration Act
(22) is a Document defining the constitution of the Company and laying down the fundamental conditions upon which the Company is allowed to be formed.
(A) Prospectus
(B) Articles of Association
(C) Memorandum of Association
(D) Any of the above
(23) In case a Company does not frame its own Articles of Association, the Formats of AOA will be available in _______ of Companies Act, 2013.
(A) Schedule I
(B) Schedule II
(C) Schedule III
(D) Schedule IV
(24) The objects of the Company are given in the -
(A) Memorandum of Association
(B) Prospectus
(C) Articles of Association
(D) Statement in lieu of Prospectus
(25) A Company comes into existence when the Registrar issues the
(A) Certificate of pollution
(B) Certificate of incorporation
(C) Certificate of commencement of business
(D) No Certificate is issued by the Registrar
(26) A can commence business only when it obtains from the Registrar, the Certificate of Commencement of Business
(A) Special Company
(B) Public Limited Company
(C) Statutory Company
(D) Private Limited Company
(27) A is a Document which invites deposits from the public to subscribe Company's shares or debentures
(A) Articles of Association
(B) Prospectus
(C) Memorandum of Association
(D) None of the above
(28) A Prospectus for shares or debentures can be issued only by-
(A) A Public Company
(B) A Private Company
(C) A Govemment Company
(D) A Defence Company
(29) Which one of the following is the Registered Capital of the Company?
(A) Paid up Capital
(B) Uncalled Capital
(C) Authorised Capital
(D) Reserve Capital
(30) The amount of Capital that is mentioned in Capital clause is know as-
(A) Authorised Capital
(B) Registered Capital
(C) Nominal Capital
(D) All of these
(31) Reserve Capital of a Company is meant to be called only at the time of -
(A) Amalgamation
(B) Holding
(C) Floatation
(D) Liquidation
BOOKS OF ACCOUNTS AND FINANCIAL STATEMENTS
(32) Under ______ Companies Act, 2013 requires that every Company should maintain proper books of accounts.
(A) Section 131
(B) Section 128
(C) Section 130
(D) Section 133
(33) Under the _______ Companies Act, 2013 at the Annual General Meeting of the Company, the Board of Directors of the Company shall lay Final Accounts before the Company.
(A) Section 128
(B) Section 129
(C) Section 131
(D) Section 132
(34) Section 129 along with of the Companies Act, 2013, deals with the preparation of Profit and Loss Account and Balance Sheet.
(A) Section 129
(B) Schedule V
(C) Schedule III
(D) Section 128
(35) According to Companies Act, 2013 a Reserve Capital is created-
(A) For a Specific Purpose at any time during its working life
(B) For issue to existing shareholders as Rights Issue of shares
(C) As Uncalled portion of Share Capital of a Limited Company to be called only in the event of winding up
(D) For conversion of Fully Convertible Debentures into Equity shares
(36) Every Company must keep proper books of accounts to record -
(A) Assets and Liabilities of the Company
(B) All sums of money received and spent and other related matters
(C) All Purchases & sales of goods by the Company
(D) All of the above
(37) Indicate which statement is wrong?
(i) Books of a Company must be kept at its Head office
(ii) Books of a Company must be kept at its Registered office
(iii) Books of a Company must be kept at its Corporate office
(iv) Books of a Company must be kept at all its offices
(A) (i), (iii) and (iv)
(B) (ii)
(C) (i) and (ii)
(D) All of the above
(38) Company Accounting conforms more to dual aspect concept than to incomplete recording system because
(i) Companies Act insists upon adoption of double entry system of book keeping
(ii) Balance Sheet could not be prepared under Section 129 of companies Act according to incomplete recording system
(iii) To show true and fair view of the affairs of the Company
(iv) To ensure adequate disclosure
(A) (i) and (ii)
(B) (ii) and (iii)
(C) (ii), (iii) and (iv)
(D) (i), (ii) and (iii)
(39) Which of the following is not required to be made under statute?
(A) Profit and loss Account
(B) Balance sheet
(C) Fund Flow Statement
(D) None
(40) Which of the following statements are wrong?
(i) A Company must prepare a Cash Flow Statement
(ii) A Company must prepare accounts only in vertical format
(iii) A Company must prepare accounts in format prescribed by Schedule V
(iv) A Company must follow all accounting standards prescribed by the ICAI
(A) (iv)
(B) (i) and (ii)
(C) All of the above
(D) None of the above
(41) Under the Companies Act, 2013 the financial year of i Company -
(A) Must not be more than 12 months
(B) Must not be less than 12 months
(C) May be more than a calendar year but it shall not exceed 15 months
(D) May be more than a calendar year but it shall not exceed 20 months
(42) Where a special permission has been granted by the Registrar, the financial year of a Company may, at the most be-
(A) Extended to 13 months
(B) Extended to 18 months
(C) Extended to 15 months
(D) Extended to 20 months
(43) Income Statement of a Joint Stock Company -
(A) Must be split into Trading A/c and P & L A/c
(B) Must be split into Trading A/c and P & L Appropriation A/c
(C) Must be split into P & L A/c and P & L Appropriation A/c
(D) Need not be split and only P & L A/c may be prepared
(44) The income statement of a Limited Company is known as -
(A) Manufacturing Account
(B) Profit and Loss Account
(C) Trading and Profit and Loss Account
(D) Profit and Loss Appropriation Account
(45) The Balance Sheet of a Company -
(A) Must be prepared in the form set out by the law
(B) May be prepared in any form
(C) Should be prepared so as to give a true and fair picture of the state of affairs of the Company
(D) None of the above
(46) ....... and ....... of Schedule III of Companies Act, 2013, deals with presentation of Profit & Loss Account and Balance Sheet.
(A) Part l and Part: II
(B) Part Il and Section 211 Current Liabilities
(C) Part Il and Part I
(D) Part I and section 210
(47) Of a Company should be in form out in Part I of Schedule III.
(A) Profit and Loss Account
(B) Balance Sheet
(C) Cash Flow Statement
(D) None of the above
(48) Profit and Loss A/c of a Company is prepared -
(A) According to format given in Schedule III
(B) In a way so as to give true and fair view of the Profit or Loss of the Company
(C) In any form
(D) According to format prescribed by Tax Authorities
(49) In the case of P & L A/c of a Company -
(A) Figures of only the current year are shown
(B) lt is essential to show, in addition to the figures of the current year, the figures of the previous year
(C) It is essential to show, in addition to the figures of the current year, the figures of the two previous years
(D) There are no restrictions regarding the no. of years for which figures are to be shown
(50) Which of the following is not a Capital Reserve?
(A) Profit Prior to Incorporation
(B) Dividend Equalization Reserve
(C) Profit on sale of Fixed Assets
(D) All of the above
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