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This set of Corporate Accounting Multiple Choice Questions & Answers (MCQs) focuses on Accounting Standards Set 2

Q1 | A subsidiary company shall be excluded from consolidation when:
  • Control is intended to be temporary
  • It operates under severe long-term restrictions which significantly impair its ability to transfer funds to the parent
  • Always included for consolidation
  • Both a and b.
Q2 | The form of balance sheet is………………..
  • Vertical
  • Horizontal
  • Horizontal and vertical
  • None of the above
Q3 | The term current asset doesn’t cover
  • Car
  • Debtors
  • Stock
  • Prepaid expenses
Q4 | P&L statement is also known as
  • Statement of operations
  • Statement of income
  • Statement of earnings
  • All of the above
Q5 | Which of the following is true about financial statements?I)Financial statement gives a summary of accounts. II) Financial statements can be stated as recorded facts.
  • Only I
  • Only II
  • Both I andII
  • None of the above
Q6 | The statement of financial position and the balance sheet are synonyms
  • True
  • False
  • none
  • none
Q7 | Which of the following statements are true?I) Financial statements are only interim report. II) Financial statements are also known as annual records. III) Financial statements are historic.
  • Both I and II
  • Both I and III
  • Both II and III
  • I, II, III
Q8 | Certain assumptions are essential to prepare financial statements.
  • True
  • False
  • none
  • none
Q9 | Premium received on issue of shares cannot be utilised for ---------.
  • for the issue of bonus shares .
  • for writing of preliminary expenses
  • for providing premium payable on redemption
  • for distribution of dividend.
Q10 | In case of public limited company, after getting the-----------the company can startthe business
  • Memorandum of Association
  • Table A
  • Certificate of commencement of business
  • Articles of Association
Q11 | Trade Payables are recorded in………………….
  • Current Liabilities
  • Current Assets
  • Equity
  • Inventories
Q12 | In company Final Accounts Goodwill is shown under……………
  • Current Liabilities
  • Current Assets
  • Fixed Assets
  • Inventories
Q13 | Dividend is payable on the amount of…………………………..
  • Profit
  • Reserves
  • Loss
  • Income
Q14 | The dividend paid between two annual general meeting is knowna……………………….
  • Final dividend
  • Ex Dividend
  • Interim Dividend
  • Dividend
Q15 | Unclaimed dividend recorded on the…………………….. the balance sheet.
  • Liability
  • Assets
  • Credit
  • Debit
Q16 | A liability which can be measured only by using a substantial degree of estimation iscalled……………………….
  • Contingent liabilities
  • Contingent Assets
  • Fixed Assets
  • Non Current Liabilities
Q17 | Unquoted shares means……………………….
  • Listed Shares
  • Quoted Shares
  • Unquoted Shares
  • Unlisted Shares
Q18 | Bills receivable is ……………………..assets.
  • Current
  • Non - current
  • Fixed Assets
  • Investment
Q19 | The amount of profit kept a side to maintain uniform rate of dividend iscalled………………
  • Ex Dividend
  • Final Dividend
  • Undistributed Dividend
  • Dividend
Q20 | Director’s remuneration shall not exceed ………………. % of the net profits.
  • 10%
  • 20%
  • 15%
  • 13.333%
Q21 | Voluntary winding up:
  • If period fixed for the company is expired.
  • If company passes a special resolution the company wound up voluntarily.
  • Members voluntary winding up is applicable to solvent companies only.
  • All of the above
Q22 | Compulsory winding up:
  • If a company unable to pay its debt
  • If the number of members of company reduced below statutory limit.
  • If a company does commence its business within a year from its incorporation.
  • All of the above.
Q23 | The first item in order of payment to be made by liquidator is:
  • Secured creditors
  • Preferential creditors
  • Liquidation expenses
  • Preferential creditors
Q24 | Liquidator’s statement of receipts and payment is know as:
  • Cash flow statement
  • Cash book
  • Liquidator’s final statement of account
  • Deficiency accounts.
Q25 | A contributory is:
  • Creditor
  • A shareholder
  • A debenture holder
  • A convertible debenture holder