1) Goodwill mean
A. Good Will
B. Credit
C. Debit
D. Good Wishes
Option: B
2) To issue shares on premium
mean
A. Issue on face value of shares
B. Issue on more than face value
of shares
C. Issue on less than face value
of shares
D. Initial public offer
Option: B
3) To issue shares on Par mean
A. Issue on face value of shares
B. Issue on more than face value
of shares
C. Issue on less than face value
of shares
D. Initial public offer
Option: A
4) To issue shares on Discount
mean
A. Issue on face value of shares
B. Issue on more than face value
of shares
C. Issue on less than face value
of shares
D. Initial public offer
Option: C
5) Cancelation of shares mean
A. Reissue of shares
B. Valuation of shares
C. Forfeiture of shares
D. Allotment of shares
Option: C
6) Which of following is not the
method of valuation of Goodwill?
A. Average profit Method
B. Super profit Method
C. Capitalization Method
D. Straight line Method
Option: D
7) Super profit
mean
A. Average Profit – Net profit
B. Average Profit – Normal rate
of return
C. Weighted Average Profit
D. Net profit – Average Profit
Option: A
8) Which of following is not
Method of calculation of Purchas Consideration?
A. Lump sum Method
B. Net Asset Method
C. Net Payment Method
D. Annuity Method
Option: D
9) Merger of two or more
companies or business undertaking to form new company mean
A. Reconstruction
B. Amalgamation
C. Absorption
D. Commandment of Company
Option: B
10) Which of following is not
Method of winding of company?
A. Compulsory winding up
B. Voluntary winding up
C. Winding up under the
supervision of the court
D. Knowingly winding up
Option: D
11) Which of following is not
Current Asset?
A. Patent
B. Bills receivable
C. Cashable security
D. Prepaid Expenses
Option: A
12) Which of following is not
Current Liability?
A. Bank overdraft
B. Bills Payable
C. Account Payable
D. Retain earning
Option:D
13) Working capital will increase
A. If Current Asset Decrease
B. If Current Liability Decrease
C. If Current LiabilityIncrease
D. If new shares are issued
Option:B
14) Following is the application
of fund
A. Decrease in balance of Fixed
Asset
B. Decrease in working capital
C. Decrease in net profit
D. Decrease in preliminary
expenses
Option:C
15) Following is the Source of
fund
A. Decrease in balance of
Debenture
B. Decrease in Long term
Liability
C. Increase in Long term loan
D. Redemption of Shares
Option:C
16) Provision for Income Tax is
_____
A. Debited to P & L
Appropriation A/c
B. Debited to Profit and Loss A/c
C. Debited to Treading A/c
D. Credited to P & L
Appropriation a/c
Option:B
17) Corporate dividend tax is
_______
A. Computed on Net profit
B. Computed on Share Capital
C. Computed on Goss Profit
D. Computed on Dividend paid
Option: D
18) Dividend is paid on _______
A. On Issued Share Capital
B. On Subscribed Share Capital
C. On Called up Share Capital
D. On Paid up Share Capital
Option: D
19) Dividend policy of a company
mainly concern with
(i) dividend payout and
(ii) Stability of dividend
A. Only (i) is correct
B. Only (ii) is correct
C. Both (i) and (ii) are correct.
D. Both (i) and (ii) are
incorrect.
Option: C
20) Discounted cash flow criteria
for investment appraisal does not include
A. Not present value
B. Benefit cost ratio
C. Accounting rate of return
D. Internal rate of return
Option: B
21) As per SEBI Guideline minimum
Application money shall not be less than
A. 25% of Issue price
B. 10% of Issue price
C. 20% of Issue price
D. 6% of Issue price
Option: A
22) The maximum allowable
discount on Equity shares is
A. 8% of Issue price
B. 10% of Issue price
C. 12% of Issue price
D. 6% of Issue price
Option: B
23) Share application Account is
_______________
A. Real A/c
B. Personal A/c
C. Nominal A/c
D. Fictitious A/c
Option: B
24) Share Allotment Account is _______________
A. Real A/c
B. Personal A/c
C. Nominal A/c
D. Fictitious A/c
Option: B
25) Share Call Account is
_______________
A. Real A/c
B. Personal A/c
C. Nominal A/c
D. Fictitious A/c
Option: B
26) Debenture holder
are____________
A. Creditor Of Company
B. Debtor of Company
C. Owner of Company
D. Members of Company
Option: A
27) Share holder are____________
A. Creditor Of Company
B. Debtor of Company
C. Owner of Company
D. Members of Company
Option: C
28) After declaration dividends
are paid to the shareholders as per the provision of
A. Indian Companies Act
B. RBI Act
C. SEBI Act
D. Indian Contract Act
Option: C
29) The first item in order of
payment to be made by liquidator is
A. Liquidation expenses
B. Secured creditor
C. Preferential creditor
D. Preference shareholder
Option: A
30) Dividend Policy must be
A. Flexible
B. Flexible and Fixed both
C. Fixed
D. All of the above
Option: A
31) Assertion (A) :The liability
of share holders in a private limited company is limited to the
amount.
Reason (R) :The number of share
holders of a private limited company is limited to 200.
A. Both A and R are true and R is
the correct explanation of A
B. Both A and R are true but R is
not a correct explanation of A
C. A is true but R is false
D. A is false but R is true
Option: D
32) Match the following
List1 (Type of
Value)
|
List2(Features of
Value)
|
(a) Market Value
|
1. Price which is present in market
|
(b) Intrinsic Value
|
2. Net Assets
|
(c) Liquidation Value
|
3. Value at wind up
|
(d) Salvage Value
|
4. Scrap Value
|
5. Cost Price
|
A.(a) (b) (c) (d)
1 4 3 2
B.(a) (b) (c) (d)
1 2 3 4
C.(a) (b) (c) (d)
1 3 2 4
D.(a) (b) (c) (d)
1 4 3 5
Option: B
33) Liquidator‘s statement of
receipt and payment is known as
A. Cash flow statement
B. Deficiency a/c
C. Statement of affairs
D. Liquidator‘s final statement
of A/c
Option: D
34) Suppliers and creditors of a
firm are interested in
A. Profitability position
B. Liquidity position
C. Market share position
D. Debt position
Option: B
35) Which is the form of
dividend?
A. Cash dividend
B. Bond dividend
C. Stock dividend
D. All of these
Option: D
36) Which is the type of
dividend?
A. Cash Dividend
B. Interest
C. Profit cum-reserve
D. Flexible Capital
Option: A
37) Which is not the form of
dividend?
A. Regular
B. Stock
C. Property
D. Zero Dividend
Option: D
38) The dividend on equity shares
is only paid when dividend on ------- has already been paid.
A. Debenture
B. Preference Shares
C. Bond
D. Equity Shares
Option: B
39) A company pays dividend at
the
A. End of the week
B. End of the financial year
C. End of the month
D. All of the above
Option: B
40) Which one is the principle of
capital structure?
A. Cost principle
B. Risk principle
C. Control principle
D. All of these
Option: D
41) In the calculation of return
on shareholders investments the referred investment deals with
A. All reserves
B. Preference and equity capital
only
C. All appropriations
D. All of the above
Option: D
42) The assets of a business can
be classified as
A. Only fixed assets
B. Only current assets
C. Fixed and current assets
D. None of the above
Option: C
43) The return on investment
(ROI) may be calculated as
A. Net profit before interest,
tax and dividend / Capital employed
B. Net profit after interest, tax
and dividend / Shareholder's fund
C. ( Net profit - preference
dividend )/ No. of equity shares
D. Return on Investment / Net
profit ratio
Option: A
44) ROI stands for?
A. Return on Investment
B. Ratio of Investment
C. Return of Income
D. None of these
Option: A
45) In case of a limited company,
the term financial statements includes
A. Profit and loss and balance
sheet
B. Profit and loss account,
profit and loss appropriation account and balance sheet
C. Balance sheet
D. None of the above
Option: B
46) The profit on the reissue of
forfeited share are transferred to
A. Capital A/ c
B. Capital Reserve
C. Profit & Loss A/c
D. General Issues
Option: B
47) The direct advantages of
accounting do not include
A. Preparation of financial
statements
B. Comparison of results
C. Competitive advantage
D. Information to interested
groups
Option: C
48) Which of the following
statements is not correct?
A.For the purpose of Funds Flow
Statement, the term 'fund ' generally refers to net
working capital
B. Funds flow is a wider concept
than the Cash flow
C.The flow of funds must arise
due to external and not internal transactions of the
business
D. The capitalisation of reserves
by the issue of bonus shares also involves flow of funds
Option: D
49) Match List I with List II and
select correct answer using the codes given below:
List1
|
List2
|
a. ABC Analysis
|
I. Capital Structure
|
b. Fund Flow Analysis
|
II. Inventory Control
|
c. ROI
|
Ill. Working Capital Management
|
d. M M Theory
|
IV. Overall Profitability
|
A.a b c d
II III IV I
B.a b c d
I II IV III
C.a b c d
IV III I II
D.a b c d
I III II IV
Option: A
50) Which one of the following is
an example of sources of funds?
A. Decrease in share capital
B. Increase in long-term
liabilities
C. Decrease in long-term
liabilities
D. Increase in fixed assets
Option: B
51) Which of the following
statement is correct?
A. Fixed assets must always be
shown at market value
B. Book-keeping and accounting
are different terms
C. Owner's Equity = Assets +
Liabilities
D. Patents is an example of
current asset
Option: A
52) Bonus shares can be issued by
a company
A. Out of the Reserves created by
revaluation of fixed assets
B. Out of share premium not
collected in cash
C. Without any provision for it
in the Articles of Association of the company
D. Out of free reserves built out
of genuine profit
Option: D
53) Current assets include
A. Stores & Spare parts
B. Stock in trade
C. Sundry Debtors
D. All of the above
Option: D
54) Which of the following
accounting equation is correct?
A. Capital + Liabilities= Assets
B. Capital = Assets + Liabilities
C. Capital- Liabilities = Assets
D. Capital + Assets = Liabilities
Option: A
55) Goods withdrawn by the
proprietor for his personal use are
A. Shown as a deduction from the
purchases
B. Shown as a deduction from the
sales
C. Treated as sales at cost price
D. Added to the purchases
Option: A
56) Unpaid calls are shown in the
balance sheet of a company
A. By adding it to the share
capital
B. By deducting it from the
called-up share capital
C. Under the head 'current
assets'
D. Under the head 'current
liabilities'
Option: B
57) Stock is
A. Included in the category of
fixed assets
B. Part of current assets
C. Intangible
D. Tangible
Option: B
58) Which of the following is not
included in the category of 'Intangible Assets' ?
A. Patents rights
B. Copy rights
C. Competitive benefit and
privileges
D. Machinery
Option: D
59) AS -10 (Accounting Standard
on Fixed Assets) does not deal with accounting for the
following items to which special
considerations apply
A. Forests, plantations and
similar regenerative natural resources
B.Wasting assets including
material rights, expenditure on the exploration for and
extraction of minerals, oil,
natural gas and similar non-regenerative resources
C. Expenditure on real estate
development and livestock
D. None of the above
Option: D
60) Which of the following assets
are dealt with by AS - 10 (Accounting Standard on Fixed
Assets)?
A. Land, building, plant and
machinery, vehicles, furniture and fittings
B. Goodwill and patents
C. Trademarks and designs
D. All of the above
Option: D
61) Cost of inventories includes
A. Direct Material + Direct
Expenses
B. Direct Labour + Direct Expenses
C.All costs of purchase, cost of
conversion and other costs incurred in bringing the
inventories to their present
location and condition
D. Direct material only
Option: C
62) Closing stock is valued at
A. Cost
B. Market value
C. Cost or market price whichever
is lower
D. None of the above
Option: C
63) Salary due to clerk is
preferential for a period not exceeding
A. 2 Month
B. 3 Month
C. 4 Month
D. 5 Month
Option: C
64) The fundamental accounting
equation' Assets = Liabilities + Capital' is the formal expression
of
A. Dual aspect concept
B. Matching concept
C. Going concern concept
D. Money measurement concept
Option: A
65) Maximum __________ can be
treated as preferential salary and wages
A. 20,000
B. 25,000
C. 30,000
D. 10,000
Option: A
66) Money spent to acquire or
upgrade physical assets is known as:
A. Revenue Expense
B. Capital Expense
C. Administrative Expense
D. Operating Expense
Option: B
67) All capital expenditures and
receipts are taken to
A. Trading and Profit and Loss
Account
B. Balance sheet
C. Trial balance
D. None of the above
Option: B
68) Which one of the following
branches of accounting primarily deals with processing and
presenting of accounting data for
internal use?
A. Financial accounting
B. Tax accounting
C. Management accounting
D. Inflation accounting
Option: C
69) Amount spent on an
advertisement campaign, the benefit of which is likely to last for three
years is a
A. Capital expenditure
B. Revenue expenditure
C. Deferred revenue expenditure
D. None of the above
Option: C
70) As per AS – 14 purchase
consideration is what is payable to
A. Shareholders
B. Creditors
C.Debentureholders
D. Shareholders and
Debentureholders
Option: A
71) Amalgamation is said to be in
the nature of merger if:
A. All assets and liabilities of
transferor company are taken over by the transferee
company.
B. Business of transferor company
is intended to be carried on by the transferee
company.
C. Purchase consideration must be
paid in equity shares by the transferee company
except for fraction shares.
D. All of the above
Option: D
72) Amalgamate adjustment account
is opened in the books of transferee company to
incorporate:
A. The assets of the transferor
company
B. The liabilities of the
transferor company
C. The statutory reserves of the
transferor company
D. The non – statutory reserves
of the transferor company
Option:C
73) Goodwill arising on
amalgamation is to be
A. Retained in the books of the
transferee company
B. Amortised to income on a
systematic basis normally five years
C. Adjusted against reserves or
profit and loss account balance
D. All of the above
Option:B
74) Under pooling of interest
method the difference between the purchase consideration and
share capital of the transferee
company should be adjusted to:
A. General reserve
B. Amalgamation adjustment account
C. Goodwill or capital reserve
D. None of the above
Option:A
75) Under purchase method the
difference between the purchase consideration and share capital
of the transferee company should
be adjusted to:
A. General reserve
B. Amalgamation adjustment account
C. Goodwill or capital reserve
D. None of the above
Option:C
76) Which of the following is not
deferred revenue expenditure?
A. Heavy advertisement
expenditure.
B. Expenses incurred in removing
the business to more convenient premises.
C. Preliminary expenses.
D. Depreciation on fixed assets.
Option: D
77) For amalgamation in the
nature of merger, the shareholders holding at least ______ or more
of the equity shares of the
transferor company becomes the equity shareholders of the transferee
company.
A. 51%
B. 90%
C. 99%
D. 100%
Option: B
78) AS – 14 is not applicable if
when Transferee Company acquires Transferor Company and
Transferor Company:
A. Ceases to exist
B. Separate entity is Continue to
exist
C. Applied in all cases
D. None of the above
Option: B
79)A Ltd. and B Ltd. go into
liquidation and a new company X Ltd. is formed. It is a case of
A. Absorption
B. External reconstruction
C. Amalgamation.
D. commencement
Option:C
80) X Ltd. goes into liquidation
and a new company Z Ltd. is formed to take over the business of
X Ltd. It is a case of:
A. Absorption
B. External reconstruction
C. Amalgamation.
D. commencement.
Option:B
81) Which of the following cannot
be treated as revenue expenditure?
A. Cost of goods purchased for
resale.
B. Wages paid for the erection of
plant and machinery.
C. Obsolescence cost.
D.Expenses incurred by way of
repairs of existing assets which do not in any way add to
their earning capacity.
Option: B
82) Which of the following has
the highest cost of capital?
A. Loans
B. Equity shares
C. Bonds
D. Preference shares
Option: B
83) Risk in capital budgeting
implies that the decision maker knows _ of the cash flows.
A. Variability
B. Certainty
C. Probability
D. None of these
Option: C
84) Cost of capital is helpful in
corporative analysis of various
A. Source of Finance
B. Source of Services
C. Source of material
D. Product
Option: A
85) Which method does not
consider the time value of money
A. Net present value
B. Internal Rate of Return
C. Average rate of return
D. Profitability Index
Option: C
86) Which of the following has
the highest cost of capital?
A. Loans
B. Equity shares
C. Bonds
D. Preference shares
Option: B
87) When the expenses of
liquidation are to be borne by the purchasing company, then the
purchasing company debits:
A. Vendor company's account
B. Bank account
C. Goodwill account.
D. Realisation A/c
Option:C
88) When the purchasing company
makes payment of the purchase consideration, it debits:
A. Business purchase account
B. Assets account
C. Vendor company's account.
D. Realisation A/c
Option:C
89) The share capital, to the
extent already held by the purchasing company, is closed by the
vendor company by crediting it
to:
A. Share capital account
B. Purchasing company's account
C. Realisation account.
D. Business purchase account
Option: C.
90) Which of the following is not
included in the assumption on which Myron Gorden proposed
a model on Stock valuation
A. Retained earning the only
source of financing
B. Finite Life of the firm
C. Taxes do not exist
D. Constant rate of return on
firms investment.
Option: B
91) X Ltd. goes into liquidation
and an existing company Z Ltd. purchases the business of X
Ltd. It is a case of:
A. Absorption
B. External reconstruction
C. Amalgamation.
D. Liquidation
Option: A
92) Liabilities (not accumulated
profits) of a company include—
A. General reserve
B. Pension fund
C. Dividend equalisation fund.
D. Retain earning
Option: B
93) When the expenses of
liquidation are to be borne by the vendor company, then the vendor
company debits:
A. Realisation account
B. Bank account
C. Goodwill account.
D. Purchasing company account
Option: A
94) Accumulated profits include:
A. Provision for doubtful debts
B. Superannuation fund
C. Workmen's compensation fund.
D. Provision for Tax
Option: C
95) For paying liabilities not
taken over by the purchasing company, the vendor company
credits:
A. Realisation account
B. Bank account
C. Liabilities account.
D. purchasing company account
Option: B
96) Which one is more appropriate
for cost of retained earning?
A. Weighted Average cost of
capital
B. Opportunity cost to the firm
C. Expected rate of return by the
investor
D. None of the above
Option: B
97) Debt financing is a cheaper
source of finance because of
A. Time value of Money
B. Rate of Interest
C. Tax deductibility of Interest
D. Dividends not payable to
lenders.
Option: C
98) The vendor company transfers
preliminary expenses (at the time of absorption) to:
A. Purchasing Company account
B. Realisation account
C. Purchasing company's account.
D. Equity shareholders' account
Option: D
99) A newly established company
cannot be successful in obtaining finance by way of
A. issue of equity capital
B. issue of preference share
C. issue of debenture
D. None of the above
Option: C
100) Which of the following
statements is true in relation to liabilities?
A. Claims against the resources.
B.Currently existing obligations
which the firm intends to meet at some time in the
future.
C. It must be capable of being
expressed in money terms.
D. All of the above
Option: D
