Accounting Standards Set 2 MCQs

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

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

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