Course

Sem

DEPARTMENT OF COMMERCE
St. Josephs College (Autonomous)
Tiruchirappalli 620 002
B. Com
Paper
IV
14UCO430208
Code

Title of the
Paper

Corporate Accounting

Staff Name

S. ARULDASS

Units

I
V

UNIT - I
1.

2.

3.

4.

5.

Share allotment is a
a) Personal A/C
b) Real A/C
c) Impersonal A/C
d) Nominal A/C
Answer:Personal A/C
Share application account is a
a) Personal A/C
b) Real A/C
c) Nominal A/C
d) Impersonal A/C
Answer: Personal A/C
The minimum share application money is
a) 5% of face value of share
b) 10% of face value of share
c) Rs. 1 per share
d) 15% of face value of share
Answer: 5% of face value of share
Premium received on issue of share account is shown on
a) Assets side of B/S
b) Liabilities of B/S
c) Credit side of P&L A/C
d) Debit side of P&L A/C
Answer: Liabilities of B/S
Premium received on issue of share can be used for
a) Distribution of dividend
b) Writing off capital losses
c) Transferring to General d) Paying fees to directors

6.

7.

8.

9.

10.

11.

12.

Reserve
Answer: Writing off capital losses
The rate of discount on share cannot exceed
a) 3%
b) 6%
c) 5%
d) 10%
Answer: 10%
Discount on issue of shares A/C is shown on
a) Assets side of B/S
b) Liabilities side of B/S
c) Debit side of B/S
d) Credit side of P&L A/C
Answer: Assets side of B/S
Discount on issue of share is a
a) Revenue loss
b) Capital loss
c) Deferred
revenue d) Neither of the above
expenditure
Answer: Capital loss
Interest on calls paid in advance has to be paid @
a) 4%
b) 6%
c) 7%
d) 9%
Answer: 6%
Interest @ ------------ is charged on call-in-arrears according to Table A of
a) 5%
b) 9%
c) 3%
d) 12%
Answer: 5%
When shares are forfeited, the share capital A/C is debited by
a) Paid-up-capital
b) Called-up-capital
c) Calls-in-arrear
d) Nominal value of such share
Answer: Called-up-capital
Discount on reissue of forfeited shares should not exceed
a) 5% subscribed capital
b) 10% reissued capital

13.

14.

15.

16.

17.

18.

c) The amount received so far d) Neither of the above

on forfeited shares
Answer: The amount received so far on forfeited shares
The profit on reissue of forfeited shares is transferred to
a) General reserve
b) Capital redemption reserve
c) Capital reserve
d) Profit & Loss A/C
Answer: Capital reserve
If share of Rs. 10, on which Rs. 8 has been called and Rs. 5 has been receiv
a) Rs.2
b) Rs. 5
c) Rs. 8
d) Rs. 10
Answer: Rs. 8
Right shares are those share which are
a) Issued by a newly formed b) First offered to the existing sharehold
company
c) Issued to the directors of the d) Issued to holders of convertible debe
company
Answer: First offered to the existing shareholders
The difference between subscribed capital and called-up-capital is called
a) Uncalled capital
b) Calls-in-arrear
c) Paid-up capital
d) Calls-in-advance
Answer: Uncalled capital
Capital redemption reserve is created
a) Out of share forfeiture A/C
b) To meet legal requirement
c) Out of securities premium d) Voluntarily
A/C
Answer: b) To meet legal requirement
Transfer to capital redemption reserve can be made from:
a) Capital reserve
b) Forfeited shares A/C
c) General reserve
d) Securities premium A/C

19.

20.

21.

22.

23.

24.

25.

Answer: c) General reserve

Transfer to capital redemption reserve A/C is not allowed from:
a) P& L A/ C
b) Debenture redemption fund
c) Workmens accident fund
d) Profit prior to incorporation
Answer: d) Profit prior to incorporation
Capital redemption reserve A/C can be used for:
a) Writing off past losses
b) Issuing fully paid bonus shares
c) Declaring dividends
d) Declaring bonus to employee
Answer: b) Issuing fully paid bonus shares
The premium on redemption of preference share can be provided out of:
a) Securities premium
b) Insurance fund
c) Forfeited shares A/C
d) Depreciation reserve A/C
Answer: a) Securities premium
Which section of the companies Act 1956 provides for issue and redemption
a) Section 80
b) Section 78
c) Section 77A
d) Section 77B
Answer:
Debenture represent the:
a) Managers share in a b) Investment by shareholders in a busin
business
c) Long term borrowing of a d) None of the above
business
Answer: c) Long term borrowing of a business
Debenture holders are the:
a) Customers of the company
b) Creditors of the company
c) Owners of the company
d) None of the above
Answer: b) Creditors of the company
Debenture are shown under the following heading in a companys Balance
a) Secured loan
b) Unsecured loan

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31.

c) Share capital
d) Current liabilities
Answer: a) Secured loan
According to companies Act 1999, the premium on issue of debentures shou
a) Share premium A/C
b) Debenture premium A/C
c) Securities premium A/C
d) None of the above
Answer: c) Securities premium A/C
Discount on issue of debenture is shown under the following heading in a co
a) Fixed Assets
b) Loans and Advances
c) investments
d) Miscellaneous expenditure
Answer: d) Miscellaneous expenditure
Interest on debenture is normally payable:
a) Half yearly
b) Quarterly
c) Annually
d) Monthly
Answer: a) Half yearly
A fixed percentage of interest on debenture is calculated on:
a) The issue price of debenture b) The nominal value of debenture
c) The face value of debenture d) None of the above
plus premium
Answer: b) The nominal value of debenture
Profit on cancellation of own debenture is transferred to:
a) Profit and loss A/C
b) Dividend equalization A/C
c) Capital Reserve
d) None 0of the above
Answer: c) Capital Reserve
UNIT - II
A company is having 40,000 equity shares of Rs 15 paid. If the dividend
market value of share will be -----------a) Rs 12.
b) Rs 8.33.
c) Rs 10.
d) Rs 12.5.
Answer: d) Rs 12.5.

32.

33.

34.

35.

36.

37.

38.

The relationship between normal rate of return and P.E ratio is ---------------a) Inverse.
b) Direct.
c) Irregular.
d) None of these.
Answer: a) Inverse.
Goodwill is a _________________.
a) Fixed Asset.
b) Current Asset.
c) Intangible Asset.
d) Tangible Asset.
Answer: c) Intangible Asset.
The value of goodwill is more in case of---------------.
a) Annuity Method.
b) Super profit Method.
c) Fair value method.
d) Capitalization Method.
Answer: a)
Annuity Method.
The dividend that is declared between AGM is-------------.
a) Interim Dividend.
b) Final Dividend.
c) Semi Dividend.
d) Half-yearly dividend.
Answer: a) Interim Dividend.
A business has a capital of 400000 at the end . It has earned profits of 5000
be-----------.
a) 42,000.
b) 37,500.
c) 35,000.
d) 40,000
Answer: b) 37,500.
The business has an average capital of 600000 and the normal rate of return
a) Rs. 10,000
b) Rs. 9,000
c) Rs. 15,000
d) Rs. 8,000
Answer: b) Rs. 9,000
The super profit of a business is 6000 and the normal rate of returns of prof
method is
a) 60,000
b) 600
c) 500
d) 60

39.

40.

41.

42.

43.

44.

Answer: b) 600
Under the yield method of valuation of equity share capital,. If for an eq
expected rate of return is 5%, then the value of equity shares is--------------.
a) 25
b) 50
c) 88
d) 100
Answer: d) 100
For calculating price earnings ratio it is essential to know-----------.
a) Market value per share.
b) Nominal value per share.
c) Paid-up value per share.
d) Un paid-up value per share.
Answer: a) Market value per share.
For calculating value of equity share by earning capacity method, it is essen
a) Nominal value per share.
b) Rate of earnings.
c) Dividend per share.
d) Paid-up value per share.
Answer: a) Nominal value per share.
Super profit is the difference between:
a) Capital
employed
and b) Average profit and normal profit.
Average capital employed.
c) Current year profit and last d) None of the above.
year profit.
Answer: b) Average profit and normal profit.
The average return of similar concerns should be considered as:
a) Average profit.
b) Expected rate of return.
c) Normal rate of return.
d) None of the above
Answer: c) Normal rate of return.
From the point of view of valuation of goodwill, the term capital employed
by:
a) Shareholders only.
b) Debenture holders only.
c) Both
shareholders
and d) Shareholders, Debenture holders and
Debenture holders.

45.

46.

47.

48.

49.

50.

Answer: a) Shareholders only.

For calculating the value of an equity share by intrinsic value method, it is e
a) Normal rate of Return.
b) Expected rate of Return.
c) Net Assets.
d) None of the above.
Answer: c) Net Assets.
For calculating the value of an equity share by yield method, it is essential t
a) Expected rate of return.
b) Called up equity share capital.
c) Capital employed.
d) None of the above.
Answer: a) Expected rate of return.
Under net assets method, the value of a share depends on the amount that w
a) Preference Shareholders.
b) Equity shareholders.
c) Creditors.
d) None of the above.
Answer: b) Equity shareholders.
The present value of annuity of Re. 1 for 8 years at 10% is Rs. 2.487. Super
A.
B.
C.
D.
a) Rs. 5,471
b) Rs. 2,200
c) Rs. 71,745
d) Rs. 54,714
Answer: d) Rs. 54,714
In comparison to face value, the valuation of shares is usually:
a) More
b) Less
c) Equal
d) Less or more
Answer: d) Less or more
When value of shares is found out on the basis of its dividend or expected d
a) Asset Valuation Method
b) Yield or Income Valuation Method
c) Fair Value Method
d) None of the above
Answer: b) Yield or Income Valuation Method

51.

52.

53.

54.

55.

56.

In respect of the valuation of shares, the employed capital means:

a) Cost price of all the assets
b) Market value of all the assets
c) Book value of all the assets
d) All the above values
Answer: b) Market value of all the assets
The value of per shares on division of amount of net assets by number of sh
a) Intrinsic Value
b) Book Value
c) Cost Price
d) Market Value
Answer: a) Intrinsic Value
If the net assets taken over by the company are less than the purchase consid
a) Secret Reserve
b) Goodwill
c) Capital Reserve
d) General Reserve
Answer: b) Goodwill
A characteristic of a fixed asset is that it is_____________.
a) intangible
b) used in the operations of a business
c) held for sale in the ordinary d) not currently used in the business but
course of the business
Answer: c) held for sale in the ordinary course of the business
The value of good will, according to the simple profit method is
a) The product of current years b) The product of last years profit and n
profit and no. of years
c) The product of average profit d) The product of next years profit and
of the given years and no. of
years
Answer: c)The product of average profit of the given years and no. of years
Expenses of management is shown in
a) Revenue a/c
b) Profit or loss a/c.
c) Profit or loss a/c appropriate d) Nominal a/c.
a/c
Answer: a)Revenue a/c

57.

58.

59.

60.

61.

62.

Transfer fee is shown in

a) Revenue a/c
b) Profit or loss a/c.
c) Profit or loss a/c appropriate d) Nominal.
a/c.
Answer: c) Profit or loss a/c appropriate a/c.
Legal fee shown on_________
a) Revenue a/c.
b) Profit or loss a/c.
c) Profit or loss a/c appropriate d) Nominal a/c
a/c.
Answer: b)
Profit or loss a/c.
Public limited companies cannot issue_____________.
a) Equity shares
b) Deferred shares
c) Preference shares
d) Debentures
Answer: b) Deferred shares
Preference dividend is to be paid before__________________.
a) Payment
of
debenture b) Payment of Income tax
interest
c) Distribution
of
equity d) All the above
dividend
Answer: c) Distribution of equity dividend
UNIT III
Accounting standard for Amalgamation is
a) AS-8
b) AS-20
c) AS-14
d) AS-3
Answer: c) AS-14
Pooling of interest methods is used to account for Amalgamation in the natu
a) Purchase
b) Sales
c) Merger
d) None of the above
Answer: c) Merger

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64.

65.

66.

67.

68.

69.

Purchase consideration, as per AS-14, should include cash and securities

companies.
a) Shareholders
b) Shareholders & Debenture holders
c) Creditors. Debenture holders d) None of the above
and Shareholders
Answer: a) Shareholders
Expenses of liquidation of transferor company may be shown as Reimb
agreed to be paid by :
a) Transferor company
b) Transferee Company
c) Both the companies
d) Neither company
Answer: b)
Transferee Company
Excess purchase consideration paid to the transferor company and debited
Amalgamation should be written off within a period of:
a) 2years
b) 8years
c) 20years
d) 5years
Answer:d) 5years
The company which is amalgamated into another company is called
a) Transferor company
b) Transferee company
c) Holding company
d) Subsidiary co.
Answer: a) Transferor company
When 2 or more companies carrying on similar business go into liquidation
a) Amalgamation
b) Absorption
c) External reconstruction
d) Internal reconstruction.
Answer: a)Amalgamation
The company which takes over another company is called .
a) Transferor company
b) Transferee company
c) Statutory Company
d) chartered company
Answer: b) Transferee company
No liquidation and no new formations identify the situation.

70.

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72.

73.

74.

a) Absorption
b) Amalgamation
c) Internal reconstruction
d) Consolidation
Answer: c) Internal reconstruction
When an existing company takes over the business of one or more existing
a) Amalgamation
b) Absorption
c) Holding
d) Internal reconstruction.
Answer: b) Absorption
This is a situation where there is compulsory liquidation and new formation
a) Amalgamation
b) Absorption
c) Redemption
d) Internal reconstruction
Answer: a) Amalgamation
The difference between agreed value of asset and liabilities is called purcha
Method.
a) Lump sum
b) Net asset
c) Net payment
d) intrinsic value.
Answer: b) Net asset
Which is the journal entry to be passed in the books of transferee company f
a) Liquidator of the transferor b) Business purchase a/c Dr.Toliquidato
company Dr.
To business purchase.
c) Transferee company a/c Dr. d) Transferor company a/c Dr.
To Realization a/c.
To realization
Answer: b) Business purchase a/c Dr.
To liquidator of the transferor company.
As per AS 14 purchase consideration is what is payable to
a) Shareholders

b) Creditors

c) Debenture holders

d) Shareholders and Debenture holders

75.

Answer: a) Shareholders
When amalgamation is in the nature of merger, the accounting method to be

76.

a) Equity method
b) Purchase method
c) Pooling of interests method d) Consolidated method
Answer: c)Pooling of interests method
When amalgamation is in the nature of Purchase, the accounting method to

77.

a) Equity method
b) Purchase method
c) Pooling of interests method d) Consolidated method
Answer: b) Purchase method
Amalgamation is said to be in the nature of merger if:

78.

a) All assets and liabilities of b) Business of transferor company is int

transferor company are taken
over by the transferee
company.
c) Purchase consideration must d) All of the above
be paid in equity shares by
the transferee company
except for fraction shares.
Answer: d) All of the above
Amalgamate adjustment account is opened in the books of transferee compa

79.

a) The assets of the transferor b) The liabilities of the transferor comp

company
c) The statutory reserves of the d) The non statutory reserves of the tr
transferor company
Answer: c) The statutory reserves of the transferor company
Goodwill arising on amalgamation is to be

a) Retained in the books of the b) Amortised to income on a systematic

transferee company
c) Adjusted against reserves or d) All of the above
profit and loss account

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83.

84.

85.

balance
Answer: b) Amortised to income on a systematic basis normally five years
Under pooling of interest method the difference between the purchase consi
be
adjusted to:
a) General reserve
b) Amalgamation adjustment account
c) Goodwill or capital reserve
d) None of the above
Answer: a) General reserve
Under purchase method the difference between the purchase consideration a
to:
a) General reserve
b) Amalgamation adjustment account
c) Goodwill or capital reserve
d) None of the above
Answer: c) Goodwill or capital reserve
For amalgamation in the nature of merger, the shareholders holding at least
company becomes the equity shareholders of the transferee company.
a) 51%
b) 90%
c) 99%
d) 100%
Answer: b) 90%
AS 14 is not applicable if when transferee company acquires transferor co
a) Ceases to exist
b) Separate entity is Continue to exist
c) Applied in all cases
d) None of the above
Answer:
A Ltd. and B Ltd. go into liquidation and a new company X Ltd. is formed.
a) Absorption
b) External reconstruction
c) Amalgamation.
d) None of the above
Answer: c) Amalgamation.
X Ltd. goes into liquidation and a new company Z Ltd. is formed to take ov
a) Absorption
b) External reconstruction
c) Amalgamation
d) None of the above
Answer: b) External reconstruction

86.

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89.

90.

91.

92.

X Ltd. goes into liquidation and an existing company Z Ltd. purchases the b
a) Absorption
b) External reconstruction
c) Amalgamation.
d) None of the above
Answer: Absorption
The share capital, to the extent already held by the purchasing company, is c
a) Share capital account
b) Purchasing company's account
c) Realisation account.
d) None of the above
Answer: c) Realisation account.
In case of intercompany holdings, the purchasing company, at the time of pa
the
vendor company by crediting:
a) Vendor company's account
b) Shares in the vendor company accou
c) Share capital account.
d) None of the above
Answer: b) Shares in the vendor company account
For paying liabilities not taken over by the purchasing company, the vendor
a) Realisation account
b) Bank account
c) Liabilities account.
d) None of the above
Answer: b) Bank account
The vendor company transfers preliminary expenses (at the time of absorpti
a) Equity shareholders' account b) Realisation account
c) Purchasing company's
d) None of the above
account.
Answer: a) Equity shareholders' account
UNIT - IV
The parent organization acquiring the controlling interest in another compan
a) Subsidiary Company.
b) Holding company.
c) Private Company
d) Deemed Public Company.
Answer: a) Subsidiary Company.
A company in which more than 50% of shares are held by other company is
a) Holding company.
b) Subsidiary company.

93.

94.

95.

96.

97.

98.

99.

c) Govt. Company.
d) Public company.
Answer: a) Holding company.
Profit made by a subsidiary company after the date of purchase of shares by
a) Revaluation profits.
b) Realization profits.
c) Capital profits.
d) Revenue profits.
Answer: b) Realization profits.
Profit made by a subsidiary company up to the date of acquisition of shares
a) Revaluation profits.
b) Realization profits.
c) Capital profits.
d) Revenue profits.
Answer: c) Capital profits.
The excess price paid by a holding company to acquire controlling interest i
a) Capital reserve.
b) Goodwill a/c.
c) Revenue reserve.
d) None of the above.
Answer: b) Goodwill a/c.
To excess of the share in equity or net assets of the subsidiary over and abov
a) Capital reserve.
b) Cost of control.
c) Revenue reserve.
d) None of the above.
Answer: b) Cost of control.
Preparation of consolidated Balance Sheet of Holding Co. and its subsidiary
a) AS 11
b) AS 22
c) AS 21
d) AS 23
Answer: c) AS 21
The share of outsiders in the Net Assets in subsidiary company is known as
a) outsiders liability
b) Assets
c) subsidiary company's
d) Minority Interest
liability
Answer: d) Minority Interest
Pre-acquisition profit in subsidiary company is considered as :
a) Revenue profit

b) Capital profit

100.

101.

102.

103.

104.

105.

106.

c) Goodwill
d) None of the above
Answer: b) Capital profit
Excess of cost of investment over paid up value of the shares is considered a
a) Goodwill
b) Capital Reserve
c) Minority Interest
d) None of the above
Answer: a) Goodwill
Excess of paid up value of the shares over cost of investment is considered a
a) Goodwill
b) Capital Reserve
c) Minority Interest
d) Non of above
Answer: b) Capital Reserve
Profit earned before acquisition of share is treated as
a) Capital profit
b) Revenue profit
c) General Reserve
d) Revaluation Loss
Answer: a) Capital profit
Profit earned after acquisition of share is treated as
a) Capital profit
b) Revenue profit
c) General Reserve
d) Revaluation Loss
Answer: b) Revenue profit
Preparation of consolidated statement as per AS 21 is
a) Optional
b) Mandatory for listed Companies
c) Mandatory for Pvt. Ltd.
d) Companies Ltd. partnership firm
Answer: b) Mandatory for listed Companies
Holding Co. share in capital profits of subsidiary company is adjusted in :
a) Cost of control
b) Shown on Assets side of Balance she
c) Revenue profit
d) None of above
Answer: a) Cost of control
Holding Co. share in revenue profits of subsidiary company is adjusted in :
a) Cost of control
b) Shown on Assets side of Balance she
c) Profit and loss account
d) None of above

Answer: c) Profit and loss account

107. Unrealised profit on goods sold and included in stock is deducted from :
a) Capital Profit
b) Revenue Profit
c) Fixed Assets
d) Minority interest
Answer: b) Revenue Profit
108. Face value debentures of subsidiary co. held by Holding Company is deduc

a) Debentures
b) Cost of control
c) Minority interest
d) Debentures in consolidated balance s
Answer: b) Cost of control
109. Minority Interest includes :
a) Share in share capital
b) Share in Capital profit
c) Share in Revenue profit
d) All of the above
Answer: d) All of the above
110. The Time interval between the date of acquisition of shares in subsidiary co
known as :
a) Pre acquisition period
b) Post acquisition period
c) Pre commencement period
d) Pre incorporation period.
Answer: b) Post acquisition period
111. Pre acquisition dividend received by Holding company is credited to
a) profit & loss A/c
b) Capital profit
c) Investment A/c
d) none of the above
Answer: c) Investment A/c
112. Post Acquisition dividend received by Holding Company is debited to

a) Bank A/c
b) profit & loss A/c
c) Dividend A/c
d) Investment A/c
Answer: b) profit & loss A/c
113. Which Exchange rate will be considered for conversion of share capital of s
a) Opening Rate
b) closing rate
c) Average Rate
d) Rate of which date share acquired (ac

Answer: d) Rate of which date share acquired (actual)

114. A subsidiary company shall be excluded from consolidation when:
a) Control is intended to be b) It operates under severe long term re
funds to the parent
temporary
c) Always
included
for d) Both a and b.
consolidation
Answer: d) Both a and b.
115. A holding company is one which holds more than;
a) 2/3 share capital of
b) 50% share capital of subsidiary comp
subsidiary company.
c) 70 % share capital of
d) None of the above. .
Government Company.
Answer: b) 50% share capital of subsidiary company.
116. A company in which more than 50% of shares are held by other company is

a) Holding company.
b) Subsidiary company.
c) Govt. Company.
d) Public company.
Answer: a) Holding company.
117. Profit made by a subsidiary company up to the date of acquisition of shares
a) Revaluation profits.
b) Realization profits.
c) Capital profits.
d) Revenue profits.
Answer: c) Capital profits.
118. Unrealised profit included in stock is :
a) Deducted from stock in b) Deducted from P&L a/c balance in co
combined balance sheet.
c) Deducted from stock and d) Shown separately in asset side of CB
P&L
a/c
balance
in
combined balance sheet.
Answer: c) Deducted from stock and P&L a/c balance in combined balance
119. Profit made by a subsidiary company up to the date of acquisition of shares

a) Revaluation profits.
b) Realization profits.
c) Capital profits.
d) Revenue profits.
Answer: c) Capital profits.
120. The excess price paid by a holding company to acquire controlling interest i
a) Capital reserve.
b) goodwill a/c.
c) Revenue reserve.
d) None of the above.
Answer: a) Capital reserve.
UNIT - V
121. Contributory is a
a) Un secured creditor
b) Preferential creditor
c) Share holder
d) debenture holder
Answer: c) Share holder
122. List A in statement of affairs gives the list of:
a) Assets specifically pledged
b) Assets not specifically pledged
c) Preferential creditor
d) Unsecured creditors
Answer: b) Assets not specifically pledged
123. List E statement of affairs gives the list of :
a) Preferential creditor
b) debenture holder
c) Unsecured creditors
d) Secured creditors
Answer: c) Unsecured creditors
124. Secured creditors are shown in the statement of affairs under:
a) List A
b) List B
c) List C
d) List D
Answer: b) List B
125. Preferential creditors are shown in the statement of affairs under:
a) List D
b) List B
c) List C
d) List A
Answer: c) List C
126. The proceeds of assets not specifically pledged and the surplus of the assets

127.

128.

129.

130.

131.

a) Preferential creditors
b) Unsecured creditors
c) Legal charges, Liquidators d) Preference share holders
remuneration and liquidation
expenses
Answer: c) Legal charges, Liquidators remuneration and liquidation expens
Any sum due to an employee out of provident fund is exempt of:
a) Unsecured creditor
b) Preferential creditors
c) Secured creditors
d) Partially secured creditors
Answer: Preferential creditors
Liquidators final statement of A/C is prepared:
a) Only in case of creditors b) Only in the case of members volunta
voluntary winding up
c) Only in case of compulsory d) Whatever may be the mode of windin
winding up by the court
Answer: d) Whatever may be the mode of winding up
Bills were discounted to the extent of Rs. 10,000 of which bills of Rs. 4,0
respect of these bills will be.
a) Rs. 10,000
b) Rs. 4,000
c) Rs. 6,000
d) Rs. 14,000
Answer: b) Rs. 4,000
When the sale proceeds of pledged security is not sufficient to pay off sec
to:
a) Unsecured creditors
b) Preferential creditors
c) Equity share capital
d) Preference share capital
Answer: a) Unsecured creditors
When liquidated company has adequate cash to pay off liabilities, the intere
a) Upto date of commencement b) Upto the date of actual payment of li
of insolvency proceedings
c) Upto the date of payment to d) None of these
the shareholders

Answer: b) Upto the date of actual payment of liabilities

132. Salaries due to clerk is preferential for a period not exceeding:
a) Two months

b) Three months

c) Four months

d) Five months

Answer: c) Four months

133. Maximum ___________ can be treated as preferential salary and wages.
a) 20000

b) 25000

c) 30000

d) 40000

Answer: a) 20000
134. B List of contributories are not liable:
a) If shares are fully paid up

b) For liabilities after they are ceases to

c) If present shareholders paid

the unpaid amount of the
shares transferred by them.

d) All of the above

Answer: All of the above

135. Liquidator is appointed by court
a) In case of compulsory b) Members voluntarily winding up
winding up
c) In
case
of
creditors d) None of these
voluntarily winding up
Answer: a) In case of compulsory winding up
136. Liquidator is appointed by members
a) In case of compulsory b) Members voluntarily winding up
winding up
c) In
case
of
creditors d) None of these
voluntarily winding up
Answer: b) Members voluntarily winding up

137. Liquidator is appointed by creditors and members

a) In case of compulsory b) Members voluntarily winding up
winding up
c) In
case
of
creditors d) None of these
voluntarily winding up
Answer: c) In case of creditors voluntarily winding up
138. When company is wound up the entire person who ceased to be the shareh
_________.
a) List E
b) List F
c) List G.
d) List H
Answer: a) List E
139. List H shows ______ account
a) Secured loan
b) Preferred.
c) Debentures.
d) Creditors.
Answer: a) Secured loan
140. A public company can be wound up by the court if the number of members
a) 3.
b) 5.
c) 7.
d) 10.
Answer: b) 5
141. The company has to submit the statement of affairs to the official liquidator
a) 14days
b) 21 days
c) 30 days
d) 45 days
Answer: a) 14days
142. A company can be liquidated by _____.
a) Compulsory winding up by b) Voluntary winding up by the member
the court.
c) Winding up under the d) All of the above
supervision of the court
Answer: a) Compulsory winding up by the court.

143. Equity shareholders are -----------.

a) Creditors of the company
b) Owners of the company
c) Customers of the company
d) None of the above
Answer: b)Owners of the company
144. Preference shareholders are---------.
a) Creditors of the company
b) Owners of the company
c) Customers of the company
d) None of the above
Answer: d) None of the above
145. Maximum ___________ can be treated as preferential salary and wages.

146.

147.

148.

149.

a) 20000

b) 25000

c) 30000

d) 40000

Answer: a) 20000
Preference dividend is to be paid before-----------.
a) Payment
of
debenture b) Payment of Income tax
interest
c) Distribution
of
equity d) All the above
dividend
Answer: b) Payment of Income tax
List H shows ______ account
a) Secured loan
b) Preferred.
c) Debentures.
d) Creditors.
Answer: a) Secured loan
Any sum due to an employee out of provident fund is exempt of:
a) Unsecured creditor
b) Preferential creditors
c) Secured creditors
d) Partially secured creditors
Answer: b) Preferential creditors
List E statement of affairs gives the list of :
a) Preferential creditor
b) debenture holder

c) Unsecured creditors
d) Secured creditors
Answer: c) Unsecured creditors
150. Secured creditors are shown in the statement of affairs under:
a) List A
b) List B
c) List C
d) List D
Answer: b) List B
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