Corporate Accounting MCQ Quiz in मल्याळम - Objective Question with Answer for Corporate Accounting - സൗജന്യ PDF ഡൗൺലോഡ് ചെയ്യുക
Last updated on Mar 12, 2025
Latest Corporate Accounting MCQ Objective Questions
Top Corporate Accounting MCQ Objective Questions
Corporate Accounting Question 1:
A company forfeited 100 equity shares of ₹10 each on which a final call of ₹4 per share was unpaid. At what minimum rate per share these shares can be reissued by the company?
Answer (Detailed Solution Below)
Corporate Accounting Question 1 Detailed Solution
The correct answer is ₹4.
Key PointsReissue of Shares:
- The price at which the shares are reissued is up to the firm, but the total amount received on the shares cannot be less than the amount that is owed on the shares.
- The sum paid out to both the first allottee and the second buyer is referred to as the entire amount in this context..
Important PointsIn the above question, A company forfeited 100 equity shares of ₹10 each on which a final call of ₹4 per share was unpaid, it means ₹6 is paid.
Hence, the company can reissue the share at minimum price of ₹4, because maximum discount should not be exceeded the paid amount.
Corporate Accounting Question 2:
Bonus shares are issued to
Answer (Detailed Solution Below)
Corporate Accounting Question 2 Detailed Solution
The correct answer is Existing Shareholders at free of cost.
Key Points
Bonus shares are issued to the Existing employees at free of cost.
Bonus Shares:
- Bonus shares are additional shares given to the current shareholders without any additional cost.
- These are company's accumulated earnings which are not given out in the form of dividends but are converted into free shares.
- A company may choose to provide pre-existing shareholders with bonus shares in the event that it isn’t able to pay dividends to them.
- The basic principle behind bonus shares is that the total number of shares increases with a constant ratio of number of shares held to the number of shares outstanding.
- Companies issue bonus shares to encourage retail participation and increase their equity base.
- When price per share of a company is high, it becomes difficult for new investors to buy shares of that particular company.
- Increase in the number of shares reduces the price per share. But the overall capital remains the same even if bonus shares are declared.
Mistake Points There was an error in first option as per the question paper, Hence, we have updated it.
Corporate Accounting Question 3:
When all the debentures are redeemed, the balance left in the debenture sinking fund account is transferable to
Answer (Detailed Solution Below)
Corporate Accounting Question 3 Detailed Solution
The correct answer is general reserve.
Sinking fund:
- A sinking fund may be defined as a fund, created by a charge against or an appropriation of profits represented by specific investments, which is brought into existence for a specific purpose, such as replacement of an asset at the expiration of its life or the redemption of debentures.
- A sinking fund is a fund containing money set aside or saved to pay off a debt or bond.
- A company that issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outlay of revenue.
- A sinking fund is established so the company can contribute to the fund in the years leading up to the bond's maturity.
- The balance of the Debentures Sinking Fund after redemption of debentures is transferred to the General Reserve account.
- It is the amount which is kept separately out of redeemed amount from debentures, that is why it is transferred to the general reserve account.
Therefore, where all the debentures are redeemed, the balance left in the debenture sinking fund account is transferable to the General Reserve account.
- Debenture: In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest.
- Capital redemption reserve account is a type of reserve maintained by a company limited by shares and as the name suggests this reserve deals with shares that are redeemable.
Corporate Accounting Question 4:
Where a company purchases its own shares out of reserves or securities premium account, a sum equal to the nominal value of the shares so purchased is transferred to the ________ and details of such transfer are disclosed in the balanced sheet.
Answer (Detailed Solution Below)
Corporate Accounting Question 4 Detailed Solution
The correct answer is Capital Redemption Reserve Account
Where a company purchases its own shares out of reserves or securities premium account, a sum equal to the nominal value of the shares so purchased is transferred to the Capital Redemption Reserve Account and details of such transfer are disclosed in the balanced sheet.
Key Points
- A share buyback is when a company buys back previously issued shares. It's a business activity in which a company makes a public announcement about a buyback offer to acquire existing shareholders' shares within a set period of time.
- A company's free reserves, the securities premium account, or the proceeds of the issuing of any shares or other specified securities may be used to acquire its own shares or other specified securities.
Important Points
Steps for Buy Back of Shares:
- Articles of Association should allow the company to buy back its own stock.
- Maximum Limit: The buyback shall not exceed 25% of the company's paid-up share capital and free reserves (in the case of equity shares, only 25% of the paid-up equity share capital).
- The debt equity ratio after the buyback should not exceed 2 : 1.
- Pass board resolution if buy back is 10% of the total paid-up Equity capital and free reserves, or special resolution If buy back is up to 25% of the total paid-up capital and free reserves.
- An amount equivalent to the nominal value of the acquired shares is deposited in the capital redemption reserve account.
Corporate Accounting Question 5:
Where a company purchases its own shares out of reserves or securities premium account, a sum equal to the nominal value of the shares so purchased is transferred to the ________ and details of such transfer are disclosed in the balanced sheet.
Answer (Detailed Solution Below)
Corporate Accounting Question 5 Detailed Solution
The correct answer is Capital Redemption Reserve Account
Where a company purchases its own shares out of reserves or securities premium account, a sum equal to the nominal value of the shares so purchased is transferred to the Capital Redemption Reserve Account and details of such transfer are disclosed in the balanced sheet.
Key Points
- A share buyback is when a company buys back previously issued shares. It's a business activity in which a company makes a public announcement about a buyback offer to acquire existing shareholders' shares within a set period of time.
- A company's free reserves, the securities premium account, or the proceeds of the issuing of any shares or other specified securities may be used to acquire its own shares or other specified securities.
Important Points
Steps for Buy Back of Shares:
- Articles of Association should allow the company to buy back its own stock.
- Maximum Limit: The buyback shall not exceed 25% of the company's paid-up share capital and free reserves (in the case of equity shares, only 25% of the paid-up equity share capital).
- The debt equity ratio after the buyback should not exceed 2 : 1.
- Pass board resolution if buy back is 10% of the total paid-up Equity capital and free reserves, or special resolution If buy back is up to 25% of the total paid-up capital and free reserves.
- An amount equivalent to the nominal value of the acquired shares is deposited in the capital redemption reserve account.
Corporate Accounting Question 6:
Part of capital which can be called-up at the time of winding of company is called:
Answer (Detailed Solution Below)
Corporate Accounting Question 6 Detailed Solution
The correct answer is Reserve Capital.
Key PointsReserve Capital:
- A company may set aside a portion of its uncalled capital to be called only if the company is wound up.
- The company's uncalled sum is referred to as 'Reserve Capital.'
- It is only available to creditors in the event of a company's liquidation.
Important Points Reserve Capital: According to Section 99 of the Companies Act 2013, Reserve Capital refers to that portion of uncalled share capital which shall not be called up, except in the event of winding up. It is not shown in the balance sheet of company and there's no compulsion to create reserve capital, a special resolution is required for creating reserve capital.
Corporate Accounting Question 7:
According to the provisions of the Companies Act, 2013, the amount of minimum application money to apply for shares should be at least __________ % of the face value of the share.
Answer (Detailed Solution Below)
Corporate Accounting Question 7 Detailed Solution
The correct answer is 5%.
Key PointsShares- A part or portion of a larger amount which is divided among a number of people, or to which a number of people contribute. The person who hold shares are called shareholders.
Important Points
When offering the share capital for public subscription, the following considerations should be made:
1. The application fee must equal at least 5% of the share's face value.
2. Calls must be placed in accordance with the articles of association.
3. The following provisions of Table A shall apply in the absence of its own articles of association:
(a) A minimum of 14 days' notice is given to the shareholders to pay the amount;
(b) The amount of the call should not be more than 25% of the face value of the share; and
(c) A period of one month must pass between two calls.
(d) All calls on shares belonging to the same class must be made uniformly.
Thus, According to the provisions of Companies Act, 2013, the amount of minimum application money to apply for shares should be at least 5 % of the face value of the share.
Corporate Accounting Question 8:
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A) : After reissue of all the forfeited shares, balance left in Forfeited Shares Account is transferred to General Reserve Account.
Reason (R) : Gain on reissue of forfeited shares is of revenue nature that is why it is transferred to General Reserve A/c.
In the context of the above statements, which one of the following is correct?
Answer (Detailed Solution Below)
Corporate Accounting Question 8 Detailed Solution
The correct answer is Both (A) and (R) are false.
Key PointsReissue of shares -Forfeited shares may be issued again as fully paid at a par, premium, discount. It should be noted that the discount permitted on reissue of forfeited shares cannot exceed the amount received on forfeited shares at the time of first issue, and that the discount allowed on reissue of forfeited shares shall be deducted to the 'Forfeited Share Account.'
Important PointsAssertion (A) : After reissue of all the forfeited shares, balance left in Forfeited Shares Account is transferred to General Reserve Account.
- Assertion is false because after reissue of all the forfeited shares, balance left in Forfeited Shares Account is transferred to Capital Reserve Account.
Reason (R) : Gain on reissue of forfeited shares is of revenue nature that is why it is transferred to General Reserve A/c.
- Reason is false because gain on reissue of forfeited shares is of capital nature that is why it is transferred to Capital Reserve A/c.
Thus, Both Assertion & Reason are false.
Corporate Accounting Question 9:
The following amounts were payable on the issue of shares by a company: Rs. 3 on the application, Rs. 3 on the allotment, Rs. 2 on the first call, and Rs. 2 on the final call. X holding 500 shares paid only application and allotment money, whereas Y holding 400 shares did not pay a final call. The amount of calls-in-arrear will be:
Answer (Detailed Solution Below)
Corporate Accounting Question 9 Detailed Solution
The correct answer is 2,800
Key Points Calls-in-arrears:
- "Calls-in-arrears" refers to an amount that has been called in respect of a share, but has not been paid before or on the specified date set for payment.
- The term "call in arrears" refers to any default in payment on a specified date.
Important Points Calculation of calls-in-arrears
For X holding 500 shares
X has not paid the first call and final call amount
Therefore,
Call is arrears = (Number of shares held by X) x (Per share first call rate + Per share final call rate)
Call is arrears = 500 x (2 + 2) = Rs. 2000
For Y holding 400 shares
Y has not paid only final call amount
Therefore,
Call is arrears = (Number of shares held by Y) x (Per share final call rate)
Call is arrears = 400 x 2 = Rs. 800
Total Amount of calls in arrears = 2000 + 800 = 2800.
Additional Information Journal entry for call money in arrears
Calls-in-Arrear A/c Dr.
To Relevant Call A/c
(Being recording of the calls in arrears)
Corporate Accounting Question 10:
When a company issues shares to vendor of asset for consideration other than cash, these are issued :
Answer (Detailed Solution Below)
Corporate Accounting Question 10 Detailed Solution
The correct answer is All of the above are correct.
Key Points
- Issuance of shares to a vendor for consideration other than cash:
- Can occur at par, at a discount, or at a premium depending on the agreed terms and negotiations between the company and the vendor.
- At par: Shares issued at their nominal value.
- At a discount: Shares issued below their nominal value, permissible under specific conditions and regulatory frameworks.
- At a premium: Shares issued above their nominal value, often reflecting the added value of the asset or confidence in the company's future potential.