Company Accounts MCQs | Company Accounts Multiple Choice Questions and Answers

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Questions
1 Share allotment account is a --.
A Real account
B Nominal account
C Impersonal account
D personal account

Answer: personal account
2 The minimum share Application money is --.
A 10% of the issue price of shares
B Re. 1 per share
C 15% of the face value of shares
D 5% of the face value of shares

Answer: 5% of the face value of shares
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3 Premium received on issue of shares cannot be utilised for---------.
A for distribution of dividend
B for the issue of bonus shares
C for writing of preliminary expenses
D for providing premium payable on redemption

Answer: for distribution of dividend
4 When shares issued at premium which of the following account is credited?
A Share allotment account
B Share forfeited account
C Share first call account
D Share premium account

Answer: Share premium account
5 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

Answer: Certificate of commencement of business
6 Trade Payables are recorded in................
A Asset side of B/S
B P & L a/c
C Liability side of B/S
D None ofthe above

Answer: Liability side of B/S
7 The shares received from the new company is recorded at
A Market value
B Face value
C Average price
D None of these

Answer: Market value
8 The original amount of preference share capital should be transferred to ............ account in the time of amalgamation in the books of vendor co.
A Capital Reserve Account
B Equity share capital Account
C Equity share capital Account
D Preference shareholders Account

Answer: Preference shareholders Account
9 While calculating purchase consideration values of assets is to be considered.
A Book value
B Average price
C Revalued price
D None of the above

Answer: Revalued price
10 Net Assets minus Capital Reserve is
A Purchase consideration
B Goodwill
C Total assets
D None of these

Answer: Purchase consideration
11 When the purchasing company does not take over a particular liability and the vendor company pays that liability, it will debit it to
A Realisation Account
B Bank Account
C Liability Account
D None of the above

Answer: Realisation Account
12 When the purchasing company bears the liquidation expenses, it will debit the expenses to
A Vendor Company‘s Account
B Bank Account
C Goodwill Account
D None of the above

Answer: Goodwill Account
13 In amalgamation of two companies
A Both companies lose their existence
B Both companies continue
C Any one company continues
D None of the above

Answer: Both companies lose their existence
14 When purchasing company pays purchase consideration, it will be debited to
A Liquidator of selling company’s account
B Business purchase account
C Assets account
D None of the above

Answer: Liquidator of selling company’s account
15 When the Vendor (seller) company agrees to bear liquidation expenses, it will debit
A Bank Account
B Goodwill Account
C Realisation Account
D None of the above

Answer: Realisation Account
16 In case of , one existing company takes over the business of another company and no new company is formed.
A Absorption
B Amalgamation
C Reconstruction
D None of the Above

Answer: Absorption
17 If amalgamation is in the , the General Reserve or Profit and Loss A/c balance will not be shown in the balance sheet.
A Form of Merger
B Form of purchase
C Net assets method
D Consideration method

Answer: Form of purchase
18 Holders of preference shares will have a right to vote if the dividend remains in arrears for a period not lessthan
A 6 years
B 3 years
C 2 year
D None of the above

Answer: 2 year
19 Premium received on issue of shares is shown on --.
A liability side of the balance sheet
B asset side of the balance sheet
C credit side of the P&L a/c.
D debit side of the P & L a/c

Answer: liability side of the balance sheet
20 Premium on issue of shares can be used for --.
A distribution of dividend
B capital losses
C writing of
D transferring to general reserve

Answer: writing of

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