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This set of Corporate Accounting Multiple Choice Questions & Answers (MCQs) focuses on Corporate Accounting Set 6

Q1 | Right shares are issued to ------
  • directors
  • promoters
  • existing share holders
  • debenture holders
Q2 | Shares which carry preferential rights are called ------
  • equity shares
  • preference shares
  • sweaty equity
  • green shoe
Q3 | A company cannot issue redeemable preference shares for a period exceeding ……….
  • 6 years
  • 7years
  • 10 years
  • 20 years
Q4 | Preference shares can be redeemed….
  • If they are fully paid up
  • if they are partly paid up
  • if they are convertible.
  • None of these
Q5 | Premium on redemption of preference shares can be provided out of ….
  • securities premium account
  • capital reserve account
  • general reserve account
  • all of these
Q6 | At present, a company limited by shares cannot issue …..preference shares
  • redeemable
  • irredeemable
  • convertible
  • none of these
Q7 | Capital redemption reserve is created out of
  • Dividend equalization fund
  • P/L account
  • General reserve account
  • All of these
Q8 | Capital redemption reserve can be utilized for…
  • declaring dividend
  • writing of capital losses
  • issue of fully paid up bonus shares
  • none of these
Q9 | ------- profit means profit which would otherwise be available for distribution ofdividend.
  • capital
  • gross
  • net
  • divisible
Q10 | Which of the following is not a source of redemption of preference shares?
  • divisible profit
  • securities premium a/c
  • realization of asset
  • proceeds of fresh issue
Q11 | The nominal value of preference shares to be redeemed can be provided out of ------
  • general reserve
  • capital reserve
  • CRR
  • securities premium
Q12 | Redemption of preference shares should not be regarded as reduction of ----- capital ofthe company.
  • paid-up
  • called-up
  • subscribed
  • authorized
Q13 | Buyback of shares should not exceed ….percent of paid up capital and free reserve of thecompany.
  • 50%
  • 10%
  • 5%
  • 25%
Q14 | Under the scheme of buyback of shares , the company in order to perform its obligations , is required to open an ….account
  • fixed deposit
  • escrow deposit
  • savings deposit
  • current deposit
Q15 | Debenture represents ….of the company
  • deposit
  • overdraft
  • loan
  • none of these
Q16 | Debenture holders are ….of the company
  • owners
  • creditors
  • both
  • none of these
Q17 | Loss on issue or discount on issue of debenture is a…..asset
  • tangible
  • current
  • fictitious
  • none of these
Q18 | When debentures are redeemed out of profits, an amount equal is transferred to…..
  • CRR
  • capital reserve
  • revenue reserve
  • debenture redemption reserve
Q19 | Profit on sale of sinking fund investment is credited to ….
  • general reserve
  • capital reserve
  • sinking fund
  • none of these
Q20 | When own debentures are cancelled any profit on cancellation is transferred to …
  • general reserve
  • capital reserve
  • P/L Account
  • none of these
Q21 | Premium on issue of debentures is a….
  • capital loss
  • capital profit
  • revenue profit
  • revenue loss
Q22 | ------ is a document which either creates or acknowledges a debt.
  • debenture
  • trust deed
  • security
  • Articles of Association
Q23 | -------- debentures are secured by a charge on the assets of the company.
  • naked
  • simple
  • unsecured
  • mortgage
Q24 | -------- is a document prepared by the company before the issue of prospectus to thepublic for subscription of debentures.
  • debenture
  • trust deed
  • abridged prospectus
  • call letter
Q25 | Companies may issue debentures as security against loans taken from banks/financialinstitutions.
  • principal
  • primary
  • collateral
  • chargeable