The purpose of ledger is to
A. Classify the transactions
B. Grouping of transactions
C. Find balance in each account
D. All of the above
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In case of dissolution, prior to final distribution to partners, the balance of cash should be equal to
A. the sale of assets plus the beginning balance of cash after payment of liabilities
B. the balance of cash prior to the sale of assets plus or minus a gain or loss from realisation
C. the sale of assets minus the beginning balance of cash prior to payment of liabilities
D. the total capital balances
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A company can buy back equity shares out of
A. its securities premium account
B. the proceeds of preference shares
C. its free reserves
D. all of the above
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Excess of face value over issue price of a share is called
A. Profit
B. Discount
C. Loss
D. Security premium
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When two or more companies liquidate to form a new company, it is called
A. amalgamation
B. absorption
C. reconstruction
D. purchase of business
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Final accounts and statements mean:
A. Balance sheet
B. Profit and loss A/c
C. Trading Account
D. All the above
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One of the following statements is wrong if there is absence of partnership deed.
A. No partner has the right to receive salary
B. No interest is allowed on capital
C. No interest is to be charged on drawings
D. Interest @ 5% is to be allowed on the partner's loan to the firm
E. Profit & losses are to be shared equally by the partner's
Select an option to see the answer and solution.
The surplus credit balance of share premium account is transferred to:
A. Profit and loss account
B. Capital redemption reserve account
C. Capital reserve account
D. Sinking fund reserve account
E. Revaluation account
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The formula is = Equity(Shareholder’s Funds) Debt(long term)
A. Debt and total funds ratio
B. Ownership Ratio
C. Capital Turnover Ratio
D. Debt-Equity Ratio
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Which one of the following statements is True:
A. Excess expenditure over income is shown on the debit side of Income and Expenditure Account
B. Subscription received in advance is not shown in receipt and payment account
C. Special subscription received by a club for Governor's Party will be shown in the Balance Sheet
D. Subscription received in 1996 for the year 1997 will be shown on the liability side of the Balance Sheet
Select an option to see the answer and solution.
Which of the following defines outstanding salary account?
A. Natural personal account
B. Artificial personal account
C. Representative personal account
D. Real account
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Which one of the following statements is wrong?
A. Only fully-paid Preference Shares can be redeemed by a company
B. Premium payable on Redemption of preference Shares can be privided for out of company's share premium account
C. Partly-paid Bonus Shares cannot be issued out of capital redemption reserve fund
D. Redeemable Preference Shares can be redeemed only out of profits of the company
Select an option to see the answer and solution.
The Purpose of providing depreciation is:
A. to reduce the book value of fixed assets to the level of their market value each year
B. to save income tax and wealth tax
C. to reduce fixed assets to nil value as soon as possible
D. to allocate the cost of fixed assets over their working life
Select an option to see the answer and solution.
Ram has 50 shares of Rs. 100 each on which Rs. 80 per share have been received. Due to non payment of final call these shares were forfeited so in this case share forfeiture account will be cridited by
A. Rs. 5,000
B. Rs. 4,000
C. Rs. 2,000
D. None of the above
Select an option to see the answer and solution.
Goodwill arising on amalgamation is to be
A. retained in the books of the transferee company
B. amortised to income on a systematic basis normally five years
C. adjusted against reserves or profit and loss account balance
D. all of the above
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In order to raise finance, which of the following securities can be issued by a company?
1. Equity Shares
2. Redeemable Equity Shares
3. Redeemable Debentures
4. Redeemable Preference Shares
5. Bonus Shares
Select the correct answer:
A. 1, 2 and 3
B. 1, 3 and 4
C. 1, 2 and 4
D. 2, 4 and 5
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Which of the following has the highest price?
A. Cash
B. Hire-Purchase system
C. Interest
D. Depreciation
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Share warrant can be issued by a company when
A. application money has been paid on shares
B. shares are partly paid
C. shares are fully paid
D. shares are lost
Select an option to see the answer and solution.
In case net sale in a year is Rs. 2,00,000 and the amount of debtors is Rs. 40,000, the average collection period will be:
A. 60 days
B. 45 days
C. 73 days
D. 75 days
Select an option to see the answer and solution.
A company can buy back
A. partly paid share
B. fully paid share
C. partly called up
D. none of these
Select an option to see the answer and solution.