TYBAF FA V Semester V Important Objectives

 

  T.Y.BAF Financial Accounting - 5

 

Important Objectives

 

1)         In Internal Reconstruction no company is liquidated

            (a) no company is liquidated                         

(b) only one company goes into liquidation

            (c) two or more companies are liquidated    

(d) one or more companies go into liquidation 

 

2)         Reduction of share capital of a company means reduction in subscribed and / or paid-up share capital

            (a) only called up share capital                 

(b) subscribed and / or paid-up share capital

            (c) only authorized capital                         

(d) only uncalled share capital

                                                                 

3)         Balance in Capital Reduction A/c is generally transferred to Capital Reserve

            (a) General Reserve                                    (b) Capital Reserve

            (c) Profit & Loss A/c                                     (d) None of the above

 

4)         The existing 1,000 shares of Rs 1 each are altered 100 shares of Rs 10 each. This is shown as consolidation

            (a) consolidation      (b) sub-division        (c) conversion in stock        (d) surrender

 

5)         The existing 1000 shares of Rs 100 each are altered to 10,000 shares of Rs 10 each. This is known as sub-division

            (a) consolidation      (b) sub-division        (c) conversion in stock        (d) surrender

 

6)         The credit balance in capital reduction a/c is utilized for Writing off deferred expenses

            (a) paying off dissentient shareholders    (b) Writing off deferred expenses

            (c) Issuing bonus shares                            (d) none of the above

 

7)         The scheme of internal reconstruction involves one company.

            (a) one                       (b) two                        (c) three                     (d) many

 

8)        Fictitious assets are to be transferred to capital reduction a/c.

            (a) capital reduction a/c                             

(b) security premium          

(c) share capital                                          

(d) capital reserve

 

9)         Balance in Capital Reduction should be transferred to capital reserve

            (a) security premium                                   (b) capital reserve

            (c) share capital                                           (d) Profit & Loss A/c

 

10)      Creditors of the company are Rs 50,00,000 one creditor for Rs 20,00,000 decided to forego 40% of his claim. He is allowed 30,000 equity shares of Rs 40 each in full satisfaction. The amount transferred to capital reduction is Rs 8,00,000

 

            (a) Rs 8,00,000         (b) Rs 10,00,000      (c) Rs 4,00,000         (d) Rs 5,00,000

 

11)      The preference shareholders agree to forego arrears of preference dividend of Rs 72,000. The amount transferred to Capital Reduction Account is Nil

            (a) Nil                         (b) Rs 72,000            (c) Rs 36,000            (d) Rs 70,000

 

12)      Investment costing of Rs 24,000 given to Bank for bank overdraft of Rs 16,000. The capital reduction is debited by Rs 8,000

            (a) Rs 4,000              (b) Rs 8,000              (c) Rs 7,200              (d) Rs 4,500

 

13)      Provision for taxation is Rs 1,00,000. The tax liability of the company is settled at Rs. 80,000 and it is paid immediately. Amount credited to capital reduction is Rs. 20,000

            (a) Rs. 80,000           (b) Rs. 1,00,000       (c) Rs. 20,000           (d) Rs. 60,000

 

14)      6% debentures of Rs 100 each Rs 1,00,000 to be converted into such number of 8% debentures of Rs 50 each as to generate the same amount of interest as before. The amount of 8% debentures will be Rs 75,000

            (a) Rs 1,00,000         (b) Rs 25,000            (c) Rs 75,000            (d) Rs 1,20,000       

 

15)      Existing 1000 shares of Rs 1 each are altered to 100 shares of Rs 10 each. This is known as  consolidation of shares .

            (a) consolidation of shares                        

(b) conversion of stock into shares                      

(c) subdivision of shares                           

(d) surrender of shares

 

16)      As per AS-14 purchase consideration is what is payable to shareholders

            (a) shareholders                                           (b) shareholders and debenture holders

            (c) shareholders and creditors                   (d) none of the above

 

17)      When amalgamation is in the nature of merger, the accounting method to be followed is pooling of interest method

            (a) equity method                                         (b) purchase method

            (c) pooling of interest method                    (d) none of the above

 

18)      Amalgamation adjustment account is opened in the books of transferee company to incorporate the statutory reserves of the transferor company

            (a) the assets of the transferor company            

            (b) the liabilities of the transferor company

            (c) the statutory reserves of the transferor company

            (d) None of the above              

 

19)      Under the ‘Purchase method of accounting’, the transferee company incorporates in its books the assets, liabilities and statutory reserves of the transferor company

            (a) the assets and liabilities of the transferor company

            (b) the assets, liabilities and statutory reserves of the transferor company

            (c) the assets, liabilities and reserves of the transferor company

            (d) None of the above

 

20)      The asset which is not taken under the Net Assets method of calculating purchase consideration is Preliminary expenses

            (a) Loose Tools                                            (b) Bills Receivable

            (c) Machinery                                                (d) Preliminary expenses

 

21)      Under ‘Purchase Method’, any excess of the amount of purchase consideration over the net acquired assets of the transferor company should be recognized as Goodwill

            (a) Capital Reserve                                     (b) Goodwill

            (c) Profit & Loss A/c                                     (d) None of the above

 

22)      Purchase Consideration for the amalgamation means aggregate of shares and cash to shareholders

            (a) Aggregate of shares and cash to shareholders

            (b) aggregate of shares, cash and payment to debenture holders

            (c) shares, cash, payment to debenture holders and expenses of realization

            (d) None of the above

 

23)      Loss or profit on realization a/c is transferred by the transferor company, under amalgamation to Equity shareholders a/c

            (a) Preference shareholders a/c                (b) Equity shareholders a/c

            (c) Profit & Loss appropriation a/c             (d) None of the above

 

24)      Amalgamation of Companies is governed by AS-14                            

            (a) AS-13                   (b) AS-14                   (c) AS-9                     (d) AS-11      

 

25)      In case of purchase method, transferee company should record assets at agreed value.

            (a) book value           (b) market value       (c) cost                       (d) agreed value

 

26)      On amalgamation, the transferor company transfer its assets to Realisation Account at book value

            (a) agreed value      (b) book value          (c) market value       (d) original cost

 

27)      According to AS 14, transferor company means the company which is amalgamated into another company.

            a) Which is amalgamated into another company.         

b) into which a company is amalgamated

c) which is newly formed               

d) none of above.

 

28)      According to AS 14, Transferee company means the company into which a company is amalgamated.

            a) Which is amalgamated into another company.         

b) into which a company is amalgamated

c) which is liquidated                     

d) none of above.

 

29)      According to AS 14, Amalgamations fall into two categories merger and purchase.

            a) Amalgamation and absorption 

b) Merger and Purchase

c) Amalgamation and reconstruction                  

d) External and internal reconstruction

 

30)      On amalgamation , Preliminary Expenses A/c appearing on the assets side of the balance sheet of the vendor company  is closed by debit to Equity shareholders A/c

            a) is closed by debit to Realization A/c   

b) is closed by debit to Equity shareholders A/c

c) is closed by debit to profit and loss A/c                       

d) is closed by credit to equity shareholders A/c

 

31)      The asset which is not taken under the net assets method of calculating purchase consideration  Preliminary expenses

            a) Loose Tools                 b) Bills receivable

c) Machinery                    d) Preliminary expenses

 

32)      Pooling of interest is a method of   Accounting for Amalgamation.

            a) Charging depreciation                                       b) Accounting for Amalgamation

c) Calculation of Purchase consideration             d) None of above.

 

33)      On amalgamation of companies, Profit and Loss Account appearing on asset side of Balance sheet of the vendor company is closed by debit to Equity shareholders A/c

            a) is closed by debit to Realization A/c   

b) is closed by debit to Equity shareholders A/c

c) is closed by debit to profit and loss A/c                       

d) is closed by credit to equity shareholders A/c

 

34)         A company can be liquidated in any of following ways under the Companies Act, 2013 after 1-4-2017

(a)       Compulsory winding-up by the Tribunal

(b)       Voluntary winding-up by the Members of Creditors

(c)       Winding-up under the supervision of the Court

(d)       All of the above

 

35)      List H shows __________ Account.                                                        

(a)       Deficiency of Surplus                               (b) Preferential Creditors

(c)       Fixed Assets Account                                 (d) None of the above

 

36)      When a company is wound-up, all persons who ceased to be the shareholders within a year before the winding-up are placed in the

(a)       ‘A’ List of Contributories                              (b) ‘B’ List of Contributories

(c)       ‘C’ List of Contributories                             (d) ‘D’ List of Contributories

 

37)      If default is made in delivering the annual return to the Registrar, the company is likely to take

(a)       compulsory winding up by the tribunal

(b)       voluntary winding up by members

(c)       voluntarily winding up by creditors

(d)       none of the above

 

38)      Following is treated as over-riding preferential creditor

(a)       Retirement benefits of employees

(b)       Retirement benefits to workers

(c)       Salary due to employees exceeding Rs 20,000

(d)       Remuneration to investigator

 

39)      Remuneration to investigator upon investigation of the affairs of company is treated as

(a)       Secured creditor                                          (b) Over-riding preferential creditor

(c)       Preferential creditor                                  (d) Unsecured creditor

 

40)      Amount of Govt. dues that arose within 12 months before the date of winding up is treated as

(a)       Secured creditor                                           (b) Over-riding preferential creditor

(c)       Preferential creditor                                  (d) Unsecured creditor

 

41)      Amount of Retirement benefits of employees exceeding Rs. 20,000 per employee is treated as

(a)       Secured creditor                                          (b) Over-riding preferential creditor

(c)       Preferential creditor                                  (d) Unsecured creditor

 

42)      Preference dividend in arrears on the date of winding up is

(a)       treated as Secured creditor            (b) treated as Over-riding preferential creditor

(c)       treated as Preferential creditor      (d) added to Preference Share Capital

 

43)      Amount of calls in advance is treated as

(a)       Secured creditor                                           (b) Asset not specifically pledged

(c)       Preferential creditor                                     (d) Unsecured creditor

 

44)      Interest on debentures and unsecured loan is payable upto the date of actual payment

(a)       if the company is solvent

(b)       if the company is insolvent

(c)       whether the company is solvent or insolvent

(d)       none of the above

 

45)      Accrued holiday remuneration becoming payable to any workman is treated as

(a)       Secured creditor                               (b) Over-riding preferential creditor

(c)       Preferential creditor                                     (d) Unsecured creditor

 

 

46)      Liability for compensation under Workmen’s Compensation Act is treated as

(a)       Secured creditor                                           (b) Over-riding preferential creditor

(c)       Preferential creditor                                     (d) Unsecured creditor

 

47)      If the remuneration to liquidator is payable as a percentage of collection

(a)       include opening cash and bank balance

(b)       exclude closing cash and bank balance

(c)       exclude opening cash and bank balance

(d)       exclude both opening and closing cash and bank balance

 

48)      A contributory is a

(a)       Unsecured creditor                                      (b) Preferential creditor

(c)       Shareholder                                                 (d) Debenture holder

 

49)      List ‘A’ in statement of affairs gives the list of

(a)       Assets specifically pledged                        (b) Assets not specifically pledged

(c)       Preferential creditors                                   (d) Unsecured creditors

 

50)      List ‘E’ in statement of affairs gives the list of

(a)       Preferential creditors                                   (b) Debenture holders

(c)       Unsecured creditors                                 (d) Secured creditors

 

51)      Secured creditors are shown in the statement of affairs under:

(a)       List A                                                  (b) List B

(c)       List C                                                  (d) List D

 

52)      Preferential creditors are shown in the statement of affairs under:

(a)       List D                                                  (b) List B

(c)       List C                                                 (d) List A

           

53)      Any sum due to an employee out of provident fund is an example of:

(a)       Unsecured creditor                          (b) Preferential creditor

(c)       Secured creditor                               (d) Partly secured creditor

 

54)      When the sale proceeds of pledged security is not sufficient to pay off secured

creditors fully, the balance due to them should be added to

(a)       Unsecured creditors                                 (b) Preferential creditors

(c)       Equity share capital                                     (d) Preference share capital 

 

55)      Equity shares can be bought back its free reserves, or the securities premium account, or the proceeds of shares

            (a) out of profits only                                  

(b) out of proceeds of fresh issue only

            (c) out of capital profits only                      

(d) its free reserves, or the securities premium account, or the proceeds of shares.

 

56)      If equity shares have been bought back out of free reserves, amount equal to the face value of equity shares bought back should be transferred to capital redemption reserve                                                                                            

            (a) development rebate reserve                (b) general reserve

            (c) sinking fund                                            (d) capital redemption reserve

 

57)      A company may purchase its own shares out of any or all of these

            (a) its free reserves only                             (b) the securities premium account only

            (c) the proceeds of any shares only         (d) any or all of these

 

58)      Revaluation reserve is not a free reserve for the purpose of buyback of shares.

            (a) Profit & Loss A/c                                                (b) General Reserve

            (c) Dividend Equalization Reserve                       (d) Revaluation reserve

 

59)      Workmen’s compensation fund (after meeting liabilities) is a free reserve for the purpose of buyback of shares.

            (a) Workmen’s compensation fund (after meeting liabilities)

            (b) Capital Redemption Reserve balance b/d

            (c) Debenture Redemption Reserve

            (d) Shares Forfeited Account

 

60)      No company shall purchase its own shares unless the buy-back is of less than 25% of the total paid-up capital and free reserves of the company

            (a) Total Paid-up capital of the company

            (b) Total paid-up capital and reserves of the company

            (c) Total paid-up capital and free reserves of the company

            (d) Total nominal capital and fee reserves of the company

 

61)      On buyback of shares, there is a reduction in the share capital to the extent of the face value of the share bought back

            (a) market value of the shares bought back       

(b) face value of the share bought back

            (c) called-up value of the shares bought back   

(d) unpaid value of shares bought back

 

62)      No company shall purchase its own shares unless the buy-back is of less than 25% of the total paid-up capital and free reserves of company  

            (a) authorized capital of company                         (b) paid-up capital of company

            (c) paid-up capital and free reserves of company   (d) called up capital of company

 

63)      Maximum buy back in a year can be 25%

            (a) 10                          (b) 25                          (c) 20                          (d) 30

 

64)      The premium paid on buy back should be provided out of security premium

            (a) security premium                                   (b) statutory premium

            (c) share capital                                           (d) capital reserve

 

65)      The Debt : Equity ratio, after buy-back should not exceed 2 : 1         

            (a) 2 : 1                      (b) 1 : 2                      (c) 1 : 1                       (d) 3 : 4

 

 

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