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CBSE Questions for Class 12 Commerce Accountancy Financial Statements Of A Company Quiz 3 - MCQExams.com
CBSE
Class 12 Commerce Accountancy
Financial Statements Of A Company
Quiz 3
The portion of the share capital which cannot be called up except on the winding up is known as _______________.
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0%
Called up capital
0%
Paid-up capital
0%
Authorized capital
0%
Reserve capital
Explanation
Reserve capital is that part of the share capital which is yet to be called by the company. It is that part of the authorised capital which can be called by the company, and is usually called upon on the winding up of the company. Reserve capital is not disclosed in the books of account.
Which one of the following is the registered capital of the company?
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0%
Paid up capital
0%
Uncalled capital
0%
Authorized capital
0%
Reserve capital
Explanation
Authorised capital or registered capital or nominal capital of a company is the amount of share capital that the company is authorised
to raise through public by issue of shares.
. Basically the capital is registered in the memorandum of association of the company. The company cannot raise money beyond the
Authorised capital or registered capital or nominal capital so registered.
"Proposed dividends' is shown in the balance sheet of a company under the head _____________.
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0%
Provisions
0%
Current Liabilities
0%
Reserves and Surplus
0%
Other liabilities
Explanation
A provision is an account which records the liability of the entity which is yet to be met. These are matched in the profit and loss account and the balance sheet. Proposed dividend is a provision created when the dividend is proposed by the directors and are yet to be paid to the shareholders. Hence they are shown in balance sheet under the head Provisions.
Under the new Company Act, 2013, paid up share capital of a 'Small Company ' does not exceed _______________.
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0%
Rs. 100 lakh
0%
Rs. 50 Lakh
0%
Rs. 5 Crore
0%
Rs. 10 Crore
Explanation
As per section 2(85) of the companies act 2013 a small company is any company, other than a public company
(i) whose share capital is not more than Rs 50 lakhs or such higher amount as may be prescribed which shall not exceed Rs 5 crore or,
(ii) Turnover or which as per its last profit and loss account does not exceed
2 crore rupees or such higher amount as may be prescribed which shall not be more than Rs 20 crore.
6
%
debentures account Rs. 3,00,000 debenture interest Rs. 6,What amount should be shown in profit & loss account?
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0%
Rs. 6,000
0%
Rs. 12,000
0%
Rs. 18,000
0%
None of the above
Explanation
In accrual basis of Accounting the incomes are recorded when they are earned whether or not they are actually received. So, the interest that needs to be shown in the profit and loss account is 6% of Rs 3,00,000 = Rs 18000. Rs 6000 is received and Rs 12000 is outstanding which will be added to Rs 6,000.
Income tax paid in advance should be shown on the ________________.
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0%
Debit side of profit & loss acount
0%
Assets side of the balance sheet
0%
Liability side of the balance sheet
0%
Credit side of the profit & loss account
Explanation
Asset means anything that the company has a right on. Income tax is an obligation that is to be met. Income tax if paid in advance is an obligation paid in advance that means that you pay in advance before it is actually due. Hence, it is an asset for the company.
According to the Companies Act, 2013, which of the following shall be treated as 'Current Investment'?
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0%
Investments in preference shares
0%
Investments in partnership firms
0%
Investment in Mutual Funds
0%
All of the above
Explanation
Current investments are the investments which are purchased with the motive of liquidating within a year. Hence, investment in preference shares, partnership firms and mutual funds are considered as Current investments because they can be liquidated in a year.
Consider the following statements :
According to the Companies Act 2013, 'goods-in-transit' shall not be disclosed under the sub-head of inventories.
The new Company Act 2013 says that 'goods-in-transit' shall also be shown as an inventory.
New Company Act 2013 describes that the mode of valuation of 'goods-in-transit' shall also be disclosed.
Which of the above statement/s is/are correct?
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0%
Only 3
0%
Only 1
0%
2 and 3
0%
1 and 2
Explanation
Goods in transit means the goods that have left the sellers place of business and have not reached the buyers place of business. As per the provisions of the companies act 2013 goods in transit should be recorded in the inventory if the legal title has been passed by the seller to the buyer and also their valuation should be disclosed by the company in the notes.
According to the new provisions of the Companies Act 2013, 'Trade Receivables' shall be sub-classified in _________.
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0%
2 parts
0%
4 parts
0%
5 parts
0%
6 parts
Explanation
According to the Provisions of the companies Act 2013, Trade receivables shall be classified into 2 parts namely debtors and Bills receivables.
Debtors are the people to whom goods are sold on credit and payment is yet to be received from them. Bills receivables are bills of exchange accepted by the debtor or received in a way of endorsement from them.
Bonus shares can be issued by a company _________________.
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0%
Out of reserves created by revaluation of fixed assets.
0%
Out of share premium not collected in cash.
0%
Without any provision for it in the articles of association of the company.
0%
Out of free reserves built out of genuine profits.
Explanation
Bonus shares are the shares which are issued by the company without any consideration. They are issued out of the free reserves available with the company. Bonus shares are issued to the existing shareholders on the basis of the number of shares they are currently holding.
According to the Companies Act, 2013, which of the following is correct name of 'CSRC'?
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0%
Corporate Special Reserve Commision
0%
Corporate Social Responsibility Committee
0%
Corporate Sinking Refund Council
0%
Corporate Special Right Commission.
Explanation
According to the Companies Act 2013, CSRC is known as Corporate Social Responsibility Committee. A
Corporate Social Responsibility Committee is a committee created by the board of directors to promote good corporate social responsibility culture in the organisation.
Under the New Companies Act 2013, 'Loans from Related Parties' is considered as _________________.
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0%
Reserves and surplus
0%
Short-term brrowings
0%
Long-term borrowings
0%
Any of the above
Explanation
Loan from related parties are generally the loans which are taken to be repaid over a period of time which is usually more than 12 months. Hence, they will be shown under the head Non current liabilities under the sub head long term borrowings.
According to the new Company Act 2013, which of the following is not included in 'Non-current Liabilities
'
?
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0%
Long-term borrowings
0%
Short-term provisions
0%
Deferred tax liabilities
0%
Long-term provisions
Explanation
Provision is created to meet the liability of the company. By short term provisions we mean that the provision is created to meet the short obligations/payments. Hence, short term provisions will appear in current liabilities and not in Non-current Liabilities.
If vendors are issued fully paid shares of Rs. 80,000 in consideration of net assets of Rs. 60,000 then the balance of Rs. 20,000 will be _____________.
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0%
Debited to profit & loss account
0%
Debited to goodwill account
0%
Credited to capital reserve account
0%
Credited to share premium account
Explanation
In case where assets are purchased or taken over for consideration other than cash then the amount in excess of the value of asset is treated as goodwill as it is the additional value paid to the vendor. In the given question the asset purchased is for Rs 60,000 and the shares allotted is for Rs 80000, hence Rs-20,000 will be debited to the goodwill account.
Assets account ..........Dr 60,000
Goodwill Account ........Dr 20,000
To Share Capital account 80,000
A Corporate Identity Number (of the CIN) is allotted to a company _________________.
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0%
From the date mentioned in the certificate of incorporation
0%
From the date of registration of the company
0%
From the date of promotion of the company
0%
From the date of formation of the company
Explanation
A Corporate Identification Number is an alpha numeric number allotted to the company by the registrar of the companies on the date when the company is registered and gets it certificate of incorporation.
Which schedule of the Companies Act 2013 describes the activities which may be included in the 'Corporate Social Responsibility (CSR) policy of a Company?
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0%
Schedule VII
0%
Schedule VI
0%
Schedule V
0%
Schedule IV
Explanation
The schedule VII of the companies act 2013 describes the activities of
'Corporate Social Responsibility'. Any company which has net worth of Rs-500 crore or a turnover of Rs-1000 crore or net profit of Rs-5 crore will have to compulsorily spend 2% of its average net profit for immediately 3 preceeding years on CSR Activities.
Dividends are usually paid on ___________ .
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0%
issued capital
0%
authorised capital
0%
paid-up capital
0%
post-incorporation profit
Explanation
Dividends are paid on the paid up capital. Paid up Capital is the capital money actually received by the company against the shares sold. Hence, the dividends are paid only to those shareholders who have paid money.
Calculate dividend yield on the ordinary shares _______________.
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0%
15
%
0%
10
%
0%
5
%
0%
2
%
Interest accrued and due on loan could be included under _______________.
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0%
Current Liabilities
0%
Provisions
0%
Loan account
0%
Capital account
Explanation
Interest accrued and due on loan should be included under the loan account. Outstanding interest which is not yet paid has to be added to the loan account as outstanding interest.
Which of the following statement is not true?
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0%
GST is a destination based tax.
0%
GST can increase the revenue of govt.
0%
GST can decrease the income of state corporations
0%
None of the above
Explanation
Goods and service tax is a source of revenue for the state corporations. It has created an increase in the government revenue because of good tax compliance.
Hence, the statement of that can decrease state corporations income is not true.
Statement A and B are true.
Interest accrued but not due on loan should be included under ________________.
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0%
Current Liabilities
0%
Provisions
0%
Loan account
0%
Capital account
Explanation
Interest accrued but not due on loan should be included under the head current liabilities as it is an obligation on the part of the company and has to be met within a period of 12 months and hence will be regarded as a current liability.
The cover for preference dividend is ___________.
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0%
13.4
times
0%
12.9
times
0%
11.7
times
0%
10.9
times
Sec. 182 of 'New Companies Act 2013' describes the provisions regarding ________________________.
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0%
Restrictions and prohibition about political contribution
0%
Restrictions about managerial remuneration
0%
Appointment of auditors
0%
Operation of Annual General Meeting (AGM)
Explanation
Section 182 of the companies act describes the provisions regarding restrictions and prohibitions about political contribution. It states that any company other than a government company which has been existing for a period of more than 3 financial years can contribute money to a political party, which cannot be more than 7.5% of the average profit of the 3 preceding financial years.
According to the provisions of Companies Act, 2013, the limit of yearly remuneration payable to a managerial person of a company having the effective capital of Rs. 25 crores shall not exceed _____________.
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0%
Rs. 80 Lakhs
0%
Rs. 75 Lakhs
0%
Rs. 70 Lakhs
0%
Rs. 42 Lakhs
The 'Abnormal Loss' on consignment is credited to _____________.
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0%
Profit and Loss Account.
0%
Consignment Account.
0%
Consignor's Personal Account.
0%
Consignee's Personal Account.
The interest paid during the year is __________.
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0%
Rs.
64000
0%
Rs.
16000
0%
Rs
32000
0%
Rs
48000
Assets turnover is ___________.
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0%
0.9
times
0%
0.5
times
0%
0.8
times
0%
0.5
times
Calculate net profit margin ________.
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0%
3.6
%
0%
6.7
%
0%
15
%
0%
20
%
Which of the following is true about financial statements:
a. Financial statements gives a summary of accounts.
b. Financial statements can be stated as recorded facts.
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0%
Only (a)
0%
Only (b)
0%
Both (a) and (b)
0%
None of the above
Explanation
Financial statement is a summarized financial reports which provide the operating results and financial position of the company. Financial statement states recorded facts.
Financial statement analysis is basically study of relationship among various financial facts and figures as given in a set of financial statement.
The cover for ordinary dividend is _____________.
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0%
1.10
times
0%
1.20
times
0%
1.34
times
0%
1.56
times
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