Questions and Answers of Corporate Accounting

Write short notes on the following :(a) Non-performing assets;(b) Acceptances and Endorsement;(c) Loss Assets.
What do you mean by(i) Standard assset;(ii) Sub-standard assets(iii) Doubtful assets of a bank ?
What are the main characteristics of a bank’s book-keeping system?
State the latest guidelines issued by the RBI in respect of payment of dividend.
What are the restrictions on the business of a banking company? What are the provisions for disposal of non-banking assets?
Which of the following is not a characteristic of a company ?A. A company is a legal entity separate and distinct from its members.B. A shareholder of a company, in its individual capacity, can bind
A company is managed by theA. Managing directorB. Persons selected by the company law boardC. Board of directorsD. Promoters
Which of the following is not a characteristic of equity share ?A. It is the risk capital of the companyB. It has voting powerC. It has no preferential right to dividedD. It can be converted into
Preference shares must be redeemed withinA. 10 years from the date of issue of such shareB. 15 years from the date of issue of such shareC. 20 years from the date of issue of such shareD. 25 years
Which of the following is not a characteristic of a public limited company ?A. Its shares are freely transferableB. The number of directors should be at least 3C. In a public company, there may be
Issued capital is the part ofA. Subscribed capitalB. Authorized capitalC. Called-up capitalD. Paid-up capital
‘Reserve capital’ can be called upA. In an emergency onlyB. Any time by passing an ordinary resolutionC. In the event and for the purposes of the company being wound-upD. If all directors agree
Subscribed capital can beA. More than called-up capitalB. More than issued capitalC. More than authorized capitalD. Equal to reserve capital
At the time of public issue of shares, which of the following steps are observed ?A. Issue of prospectus→selection of merchant bankercash received from applicantsB. Issue of prospectus→cash
Shares can be issued by a public company throughA. Public offer onlyB. Private placement onlyC. Rights / bonus issueD. All the above
Which of the following is not true for stock ?A. Stock is in lump holdingB. Stock can be issued directlyC. Stock must be fully paidD. Stock is never numbered
The minimum application moneys to be paid by an applicant along with the application money shall not be less thanA. 20% of the face value of the sharesB. 20% of the issue priceC. 25% of the issue
In case of a public issue, the underwriting of shares isA. MandatoryB. OptionalC. Mandatory if the issue size is more than 100 croresD. Mandatory if the issue size is more than 100 crores but less
Calls-in-arrear is shown in the Balance SheetA. On the assets section under ’Current Assets’B. On the equity and liabilities section under ’Share Capital’ as a separate itemC. On the equity
Calls-in-advance is shown in the Balance SheetA. On the liabilities section as a part of share capitalB. On the liabilities section under ’Current Liabilities’ as a separate itemC. On the assets
Which of the following statement is true for ’Commission on Issue of Shares’ ?A. It is shown in the Balance Sheet as a liabilityB. It is capitalised and shown in the Balance Sheet permanentlyC.
As per Table F of Schedule I to the Companies Act, 2013, interest on calls-in-arrear is payableA. @ 6% p.a.B. @ 5% p.a.C. @ 10% p.a.D. @ 12% p.a.
At the time of forfeiture of sharesA. Share capital account is credited with the called-up value of shares forfeitedB. Share capital account is debited with the face value of shares forfeitedC. Share
Till the forfeited shares are re-issued, balance of Forfeited Shares A/c will be shown in Balance SheetA. As a separate itemB. As a part of the subscribed capitalC. As an item of reserve and
Profit on re-issue of shares is transferred toA. Profit and loss accountB. General reserveC. Capital redemption reserveD. Capital reserve
Shares are issuedA. For cash onlyB. On credit onlyC. For cash or for consideration other than cashD. For consideration other than cash only
The minimum application value shall be within the range ofA. ₹ 5,000 to ₹ 10,000B. ₹ 2,000 to ₹ 5,000C. ₹ 10,000 to ₹ 15,000D. ₹ 10,000 to ₹ 20,000
A company can issue equity shares with differential rights as to dividends, voting or otherwiseA. If it is authorised by articles of association onlyB. If the issue is authorised by special
The face of equity shareA. Cannot be less than ₹ 10 in any circumstancesB. Can be less than ₹ 10 if the issue price is less than ₹ 500C. Can be less than ₹ 10 if the issue price is less than
An issuer shall not make an allotmnent pursuant to a public issue of the number of the prospectrive allottes isA. less than 200B. less than 500C. less than 1,000D. None of the above
Before issue of bonus sharesA. The partly paid-up shares, if any, are to be forfeitedB. The partly paid-up shares, if any, are to be made fully paid-upC. The partly paid-up shares, if any, will be
The bonus issue should be made out of free reserves andA. It does not include securities premiumB. It includes all securities premium received in cash or kindC. It includes securities premium
The company shall implement the bonus issueA. Within 45 days from the date of approval of the issue by its board of directorsB. Within 30 days from the date of approval of the issue by its board of
A company makes a bonus issue of shares. What is the effect on the net assets and the reserves in the Balance Sheet? Net Assets A B C
Stock split is the process ofA. Consolidating the face value of the shares of the companyB. Reducing the capital of the companyC. Restruicturing the capital of the companyD. Reducing face value of
In a rights issueA. Normal prospectus is issuedB. Red-herring prospectus is issuedC. No prospectus is issuedD. Red-herring prospectus is issued before final prospectus
‘Employee Stock Option’ can be offered to :A. Whole time directors of the company onlyB. Officers of the company onlyC. Employees of the company onlyD. All of the above
Preference shares cannot be redeemed unless they are:A. Fully called upB. Fully paid upC. Issued at a premiumD. Issued at par
Which of the following cannot be utilized for transferring to capital redemption reserve account?A. General reserveB. Profit and loss account balanceC. Dividend equalization fundD. Securities premium
Which of the following cannot be utilized for the purpose of redemption of preference shares?A. Proceeds from issue of equity sharesB. Proceeds from issue of preference sharesC. Proceeds from issue
Proceeds in connection with issue of shares at a premium would mean:A. Face value of shares issuedB. Face value of shares issued less expenses on issue of sharesC. Face value of shares issued plus
Capital Redemption Reserve can only be used for issuingA. Rights sharesB. Partly paid up bonus sharesC. Preference sharesD. Fully paid up bonus shares
Resolution for redemption of preference shares and the issue of new shares for this purpose are passed:A. SeparatelyB. SimultaneouslyC. Within a weekD. After one week
Securities premium money out of fresh issue:A. Can be treated as proceedsB. Can be treated as revenue profitC. Cannot be treated as proceedD. Can be treated as proceeds under special circumstances
At present, a company can issue preference shares which is:A. IrredeemableB. Redeemable after the expiry of 20 years from the date of issueC. Redeemable before the expiry of 20 years from the date of
Dividend on preference shares is paid:A. At a variable rateB. At a fixed rate / fixed amountC. At par with equity sharesD. At par with debenture interest
A partly paid up preference share can be redeemed:A. After the permission from Company Law BoardB. After making them fully paid upC. After passing a special resolutionD. After the permission of board
Debentureholders are:A. The owners of the companyB. The creditors of the companyC. The customers of the companyD. The vendors of the company
DebentureA. Can be forfeited for non-payment of calls moneyB. Cannot be forfeited for non-payment of calls money as per the provision of Section 71(12) of the Companies Act, 2013C. Can be forfeited
At the time of liquidation, debentureholders are paid offA. After the shareholdersB. Before the preferential creditorsC. Before the shareholdersD. After the preferential creditors and shareholders
Debentures are shown in the company Balance Sheet underA. Reserve and SurplusB. Non-current LiabilitiesC. Current LiabilitiesD. Short-term Borrowings
‘Naked’ debentures areA. Secured by a charge upon some or all assets of the companyB. Not secured by any charge upon any assetsC. Secured by a charge upon fixed assets of the companyD. Secured by
Interest on debentures areA. The charges against profitsB. The appropriation of profitsC. Not taken into consideration for calculating taxable income of the companyD. None of the above
As per the provision of the Companies Act, 2013, a company can issueA. Irredeemable debenturesB. Unsecured debenturesC. Secured redeemable debenturesD. Unsecured but redeemable debentures
An issue of secured debentures may be made, provided its redemption shall not exceedA. 5 yearB. 8 yearsC. 10 yearsD. 15 years
In case of public issue of debt securitiesA. The credit rating is optionalB. The credit rating from at least two credit rating agencies are requiredC. The credit rating from at least one credit
The Debenture Redemption Reserve shall be createdA. Out of capital profit onlyB. Out of securities premium accountC. Out of the profit of the company available for payment of dividendD. Out of
Where a company fails to redeem the debentures on the date of its maturity, the debenture trustees may apply for remedy toA. The High CourtB. The Ministry of Corporate AffairsC. The Registrar of
Debenture Redemption Reserve is to be created fromA. Securities PremiumB. Capital Reserve not realised in cashC. Revaluation ReserveD. Profits available for dividend
No Debenture Redemption Reserve is required for debentures issued byA. Public limited companies engaged in infrastructure projectsB. Public limited companies manufacturing defence goodsC. Banking
Merchants Ltd. issued 10,000, 7.5% debentures of ₹1,000 each on 1st July, 2004 at a price of ₹990. There was a provision at the time of issue that the debentures can be redeemed either by
On 1st April, 2017, Y Ltd. purchased 1,000, 12% debentures of ~ 100 each @ ₹ 98 (cum-interest). Interest is payable half-yearly on 30th June and 31st December. The date of closing the books of
Can a company purchase its own debentures? If so, for what purposes?
Swati Associates Ltd. has issued 10,000, 12% Debentures of ₹100 each on 1.1.2014. These debentures are redeemable after 3 years at a premium of ₹5 per debenture, interest is payable annually. On
On 1st April, 2017, Y Ltd. purchased 1,000, 12% debentures of ₹ 100 each @ ₹ 98 (ex-interest). Interest is payable half-yearly on 30th June and 31st December. The date of closing the books of
Explain the Sinking Fund Method of redeeming debentures.
Light Limited had ₹12,00,000, 12% Debentures of ₹100 each outstanding on 31.3.2016. The following balances also appeared in the books of the company on the same date:
Write a short note on the Insurance Policy Method of redeeming debenture.
On 1st January, 2016, Shiwalik Breweries Ltd. had ₹8,00,000, 5% debentures outstanding in its books redeemable on 31st December, 2016. On 1st January, 2016, the balance of Sinking Fund was
The Manager of M/s. Slow and Steady Ltd. is entitled to get a salary of ₹2,500 per month plus 1% commission on the net profits of the company after such salary and commission. The following is the
What do you understand by "Divisible Profits"?
What is defined by the statement below ?‘A resource control by an entity as a result of past events and from which future economic benefits are expected toflow to the entity.’A. A liabilityB. An
Write short notes on:(i) Interim Dividend;(ii) Unclaimed Dividend; and(iii) Preference Dividend.
What will result in an increase in cash funds to a business ?A. Bonus issue of shares;B. Increase in authorised share capital;C. Revaluation of fixed assets;D. Rights issue of shares.
Which statement about bonus share is true ?A. They may be issued as repayment of debenturesB. They may be issued at a premiumC. They may be issued to the holders of preference sharesD. They may be
A company’s share capital consists of 1,50,000 equity shares of ₹ 5 each. It makes a rights issue of 1 equity shares for every 3 already held at ₹ 12 per share. It then makes a bonus issue of 1
A company’s Balance Sheet as at 31.12.2014 included: Equity Shares of * 5 each, fully paid Cash at Bank The following then took place : 2015 February A one-for-two rights issue of equity shares of
The following balances have been extracted from the books of Pioneer Traders Ltd. as on 31st March, 2017: Share Capital (Authorised and Issued): Equity (15,00,000) Shares of 100 each 8% Redeemable
Anonymous Limited closes its books on 31st March every year. A newly appointed assistant drew up the following Trial Balance as on 31.3.2017: Particulars Sh. Capital: (4 lac eq.sh. of 10
The following is the Trial Balance of Bee Ltd as on 31st March, 2017: Debits Stock as on 1.4.2016 Purchases Wages Carriage on goods purchased Furniture Salaries Rent Sundry Trade Expenses Dividend
What is defined by the following statement ? "a present obligation . . . arising from past events, the settlement of which is expected to result in an outflow . . . of resources."A. An expenseB. A
The directors of ABC Ltd. are revieweing the company’s draft financial statements for the year ended 31st March, 2017. The following material matters are under discussion:1. After the Balance Sheet
A customer of P Ltd claimed on 25th February, 2016, a fault in a product sold by P Ltd caused damage to its production line. The customer is seeking damages of ₹ 1,60,000. P Ltd has accepted the
Which of the following can be recognized as intangible assets in a company’s financial statements?(i) Internally generated goodwill(ii) Purchased goodwill(iii) ReputationA. (i) OnlyB. (ii) OnlyC.
From the following information of Hindustan Construction Company Limited, you are required to prepare a Statement of Profit and Loss for the year ended on 31st March, 2017: Gross Sales / Revenue from
The draft financial statements of P K Ltd for the year ending on 31st March, 2016, represent a profit of ₹ 4,25,000. The following issues have not yet been taken into account:(a) On 16th April,
Goodwill may be classified as either internally generated or purchased. How should goodwill be dealt with in financial statements?A. Only purchased goodwill should be recognizedB. Only internally
The Balance Sheet of ABC Co. Ltd. discloses the following financial position as at 31.12.2015: I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital (b) Reserves and Surplus - General
Hammer Ltd. and Grace Ltd. propose to amalgamate. The Balance Sheets of Hammer Ltd. and Grace Ltd. as on 31st December, 2015 are given below: Balance Sheets of Hammer Ltd. and Grace Ltd. as at 31st
All India Motels Ltd. absorbed the business of West India Motels Ltd. as on 31st March, 2016. Their respective position of assets and liabilities as on that date, prior to absorbtion were as under:
Following a series of trading losses, Failure Ltd. resolved to reduce its capital to 50,000, Equity Shares of ₹ 4 each, fully paid and to eliminate its Securities Premium Account. The Company’s
What do you mean by Capital Reduction ?
The company must passA. A members resolution to reduce the share capitalB. An ordinary resolution to reduce the share capitalC. A special resolution to reduce the share capital.
State the procedures for Capital Reduction.
Give Journal Entries for the following transactions in connection with internal reconstruction :(i) 10,000 Equity Shares of ₹ 10 each fully paid, reduced to shares of ₹ 5 each fully paid.(ii)
The summarised Balance Sheet of Siliguri Transport Co. Ltd. as on 31st March, 2016 was as follows:A scheme of capital reduction was duly approved and adopted. The Equity Shares were reduced to the
Capital reduction must be authorised by itsA. Articles of associationB. Memorandum of associationC. None of the above.
What are the steps to be followed at the time of formulating a scheme of capital reduction?
Capital reduction scheme is worth consideringA. If the company is smallB. If the company has recovery prospectsC. If the company has no prospects.
A public limited company passed the necessary Resolution and received sanction of the Tribunal for the reduction of its share capital by ₹ 5,00,000 for the purposes enumerated hereunder:(a) To

Showing 1000 - 1100 of 1340