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This set of Financial Accounting 2 Multiple Choice Questions & Answers (MCQs) focuses on Financial Accounting 2 Set 8
Q1 | If the hire purchaser fails to make payment of any installment, it is called _______
- default
- repossession
- sale
- purchase
Q2 | If the hire vendor may take away all the goods on which there is default of installment itis called____________
- repossession
- partial repossession
- complete repossession
- purchase.
Q3 | The hire vendor takes away only a portion of the goods on which there is default ofInstallments it is called _________
- repossession
- partial repossession
- complete repossession
- purchase
Q4 | In the books of hirer, for payment of installment hire vendor account will be ________
- debited
- credited
- rectified
- reversed
Q5 | In the books of hirer, for interest due at the end of the year hire vendor account will be_______
- debited
- credited
- rectified
- reversed
Q6 | In the books of Hirer, the interest and depreciation account will be transferred to ______.
- trading account
- p & l account
- p & l appropriation account
- balance sheet
Q7 | Nature of hire purchase agreement is __________.
- agreement of sale
- option to transfer
- option to buy
- option to sell
Q8 | In case of Hire-Purchase the total sum payable by the hire-purchaser as per terms in orderto complete the transactions is
- net cash price
- net hire-purchase charges
- hire-purchase price
- cash price instalment
Q9 | Under ______ system the buyer does not get ownership of goods immediately
- installment
- hp
- installment and hp
- none of these
Q10 | ________ means the price at which the goods can be purchased by the hirer for readycash.
- hp price
- installment price
- cash price
- down payment
Q11 | ________ is the initial payment made at the time of signing the hire purchase agreement
- hp price
- installment price
- cash price
- down payment
Q12 | The difference between hire purchase price and the cash price is called ______
- hire charges
- cost of the asset
- installment price
- cash price
Q13 | In order to deal with the re possession the hire vendor operates an account called _______
- asset account
- goods account
- goods repossessed account
- none of these
Q14 | Hire Purchase price =
- cash price + down payment
- cash price + total interest
- cash price
- sum of total instalments
Q15 | Cash Price =
- hire purchase price – total interest
- down payment in cash
- down payment + interest
- none of the above
Q16 | Which of the following statement is false:
- a company is a legal entity quite distinct from its members
- a company can buy its own share
- a shareholder is the agent of the company
- same person can agent and creditor of the company
Q17 | Which of the following are the characteristics of a company
- liability of the members is limited up to the face value of shares held by them
- it is a voluntary association of persons
- a company is a separate body can sue and be sued in its own name
- perpetual succession
Q18 | Share application and allotment account is a:
- personal account
- real account
- nominal account
- none of the above
Q19 | Securities premium account is shown on the liabilities side of the balance sheet under thehead:
- share capital
- reserves and surplus
- current liabilities
- non-current liabilities
Q20 | As per section 78 of the companies act, amount collected as premium on securities cannotbe utilized for:
- issuing fully paid bonus shares to the members
- purchase of fixed assets
- writing off preliminary expenses
- buy back of it’s own shares
Q21 | The portion of the authorised capital which can be called-up only on the liquidation of thecompany is called
- authorised capital
- reserve capital
- issued capital
- called up capital
Q22 | Which of the following statement is false:
- buy back must be authorised by articles of company
- a special resolution must be passed for buy back
- shares can be partly paid up
- the ratio of debt owed by the company is not more than twice the capital and its
Q23 | If shares are bought back out of free reserves then a sum equal to nominal value of theshares so bought back is transferred to:
- capital reserve account
- capital redemption reserve account (crr)
- general reserve account
- statutory reserve account
Q24 | Maximum buy back limit in any year is ______ of total paid up equity capital and freereserves.
- 25%
- 10%
- 20%
- no limit
Q25 | Which of the following statement in false:
- bonus issue is made out of free reserves or securities premium collected in cash only
- bonus shares can be issued out revaluation profit
- no bonus issue shall be made within 12 months of any public or right issue
- company can issue bonus shares in any ratio.