Accounting Questions for Corporations

Questions for Corporations accounting

Corporate Accounting Questions:

Ques. A company is managed by its __
(a) Partners
(b) Auditor
(c) Board of Directors
(d) Debenture holder

Ans. (c)

Ques. A newly established company cannot issue shares at __
(a) Par
(b) Premium
(c) Discount
(d) All of these

Ans. (c)

Ques. In internal reconstruction, increase in the value of fixed assets is credited to _
(a) Capital reserve
(b) Share capital
(c) General reserve
(d) Capital reduction account

Ans. (d)

Ques. In …… the company offers the investors an opportunity to bid collectively.
(a) Private Placement
(b) Offer for sale
(c) Book building
(d) IPO

Ans. (c)

Ques. The profit on reissue of forfeited shares is transferred to __
(a) General reserve
(b) Capital Redemption reserve
(c) Capital reserve
(d) Investment Allowance reserve

Ans. (c)

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Ques. The security premium account is shown in the balance sheet under the head __
(a) Share capital
(b) Reserves & Surplus
(c) Secured loans
(d) Current liabilities

Ans. (d)

Ques. Which of the following is an example for capital profit?
(a) Capital Reserves
(b) Security premium
(c) Forfeited shares
(d)  All of these

Ans. (d)

Ques. In internal reconstruction, amount sacrificed by shareholders are credited to __
(a) Capital reserve
(b) General Reserve
(c) Capital reduction account
(d) None of these

Ans. (c)

Ques. __ should be deducted from the share capital to determine the paid up capital.
(a) Security premium
(b) Calls in advance
(c) Calls in arrears
(d) Discount on issue

Ans. (c)

Ques. Preference shares cannot be redeemed at __
(a) Par
(b) Premium
(c) Discount
(d) All of these

Ans. (c)

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Ques. After realizing all the investments, the balance in the sinking fund account is transferred to __
(a) Profit and Loss A/c
(b) Debenture Account
(c) Sinking fund A/c
(d) Capital reserve

Ans. (d)

Ques. Preliminary expenses not written off are shown in the balance sheet under the head __
(a) Current Assets
(b) Investments
(c) Current Liabilities
(d) Miscellaneous Expenditure

Ans. (d)

Ques. ……..is called a factory of credit.
(a) Company
(b) Firm
(c) Bank
(d) None of these

Ans. (c)

Ques. …………… preference shares can be redeemed
(a) Fully paid
(b) Partly paid
(c) Both A and B
(d) None of these

Ans. (a)

Ques. Which of the following is an example for divisible profit?
(a) General Reserve
(b) Security premium
(c) Forfeited shares
(d)  All of these

Ans. (a)

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Ques. __ is the company into which a company is amalgamated.
(a) Transferor company
(b) Transferee Company
(c) Subsidiary company
(d) Holding company

Ans. (b)

Ques. Amalgamation adjustment account is opened in the books of Transferee Company to incorporate __
(a) The assets of transferor company
(b) The statutory reserves of Transferor Company
(c) The liabilities of transferor company
(d) The statutory reserves of Transferee Company

Ans. (b)

Ques. NPA stands for __
(a) Non‐ Performing Assets
(b) Normal Performing Assets
(c) National Performing Asset
(d) None of these

Ans. (a)

Ques. A charge created not on specific assets but generally on all assets is known as………….
(a) Fixed charge
(b) Floating charge
(c) Mortgage
(d) None of these

Ans. (b)

Ques. ……..is a charge against profit of the company
(a) Provision
(b) Reserves
(c) Surplus
(d) All of these

Ans. (a)

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Ques. Under purchase method, the excess of net assets over purchase consideration is __
(a) Debited to goodwill account
(b) Credited to goodwill account
(c) Credited to capital reserve account
(d) Debited to capital reserve account

Ans. (c)

Ques. __ is not transferred to realisation account
(a) Goodwill
(b) Fictitious asset
(c) Trademark
(d) All of these

Ans. (b)

Ques. ___ is an artificial person created by law
(a) Firm
(b) Sole trader
(c) Company
(d) None of these

Ans. (c)

Ques. In ……………, a new company is formed to take over the business of two or more existing companies which go into liquidation
(a) Amalgamation
(b) External reconstruction
(c) Absorption
(d) Internal reconstruction

Ans. (a)

Ques. Company which is amalgamated into another company is called ……………..
(a) Transferor company
(b) Transferee Company
(c) Purchasing company
(d) Holding company

Ans. (a)

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Ques. In __, the company does not loss its identity
(a) Amalgamation
(b) External reconstruction
(c) Absorption
(d) Internal reconstruction

Ans. (d)

Ques. Capital Reduction Account is a __
(a) Nominal Account
(b) Permanent Account
(c) Temporary Account
(d) None of these

Ans. (c)

Ques. ……….is the first stage in the formation of a public company
(a) Promotion
(b) Incorporation
(c) Capital Subscription
(d) Commencement

Ans. (a)

Ques. Purchase consideration is payable to …………..
(a) Creditors
(b) Shareholders
(c) Debenture holders
(d) All of these

Ans. (b)

Ques. The purchase of an existing company which goes into liquidation by another existing company is known as …………..
(a) Amalgamation
(b) External reconstruction
(c) Absorption
(d) Internal reconstruction

Ans. (c)

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Ques. In case of subdivision of share capital, the total number of shares __
(a) Increases
(b) Decreases
(c) Does not change
(d) None of these

Ans. (a)

Ques. Alteration of shares of smaller amounts into shares of larger amount is called __
(a) Subdivision of shares
(b) Consolidation of shares
(c) Cancellation of shares
(d) None of these

Ans. (b)

Ques. Compulsory cancellation of shares by the company\y due to non‐payment of allotment or call money is called …………….
(a) Surrender of Shares
(b) Buy back of shares
(c) Forfeiture of shares
(d) All of these

Ans. (c)

Ques. Loss on realisation is transferred to …………..
(a) Transferee Company Account
(b) Transferor Company Account
(c) Shareholders Account
(d) Creditors Account

Ans. (c)

Ques. Liquidation expenses paid by the transferee company are debited to ………
(a) Liquidation expense Account
(b) Liquidators Account
(c) Preliminary expenses Account
(d) Goodwill Account

Ans. (d)

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Ques. SLR stands for __
(a) Savings Level Ratio
(b) Statutory Liquidity Ratio
(c) Standard Liquidity Ratio
(d) None of these

Ans. (b)

Ques. Acceptance, endorsements and other obligations come under the head…
(a) Provisions and Contingencies
(b) Contingent liabilities
(c) Deposits
(d) Borrowings

Ans. (b)

Ques. Preference shareholders are __
(a) Debtors of the company
(b) Creditors of the company
(c) Owners of the company
(d) None of these

Ans. (c)

Ques. Which of the following is not a statutory reserve?
(a) General reserve
(b) Development rebate reserve
(c) Investment allowance reserve
(d) Workmen compensation fund

Ans. (a)

Ques. Trade liabilities include ………..
(a) Creditors
(b) Debentures
(c) Bank overdraft
(d) All of these

Ans. (a)

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Ques. …………..is that portion of capital which is called up only on winding up of the company.
(a) Authorised Capital
(b) Issued capital
(c) Subscribed capital
(d) Reserve capital

Ans. (d)

Ques. The share capital account is debited with …………while forfeiting shares
(a) Calls in arrears
(b) Paid up capital
(c) Called capital
(d) Issued capital

Ans. (c)

Ques. An item which may or may not be the liability of the company due to happening of certain event is…………
(a) Current Liability
(b) Fixed Liability
(c) Contingent Liability
(d) None of these

Ans. (c)

Ques. Internal reconstruction is done due to ………..
(a) Accumulated losses
(b) Shortage of working capital
(c) Large amount of fictitious assets
(d) All of these

Ans. (d)

Ques. Internal reconstruction can be ………
(a) Alteration of share capital
(b) Reduction of share capital
(c) Re‐organization of capital
(d) All of these

Ans. (d)

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Ques. Preference shares can be redeemed by………….
(a) Fresh issue of shares
(b) Profit
(c) Partly out of fresh issue and partly out of profit
(d) All of these

Ans. (d)

Ques. Capital Redemption Reserve Account can be utilized for………
(a) Writing off past losses
(b) Issuing partly paid bonus shares
(c) Writing off capital losses
(d) Issuing fully paid bonus shares

Ans. (d)

Ques. Pooling of interest method is used in the case of ……………..
(a) Amalgamation in the nature of purchases
(b)  External reconstruction
(c) Amalgamation in the nature of merger
(d) Internal reconstruction

Ans. (c)

Ques. The balance in Capital Reduction Account is transferred to …………
(a) General Reserve
(b) Profit and loss Account
(c) Capital Reserve
(d) Goodwill Account

Ans. (c)

Ques. In case of subdivision of share capital, the amount of share capital……….
(a) Increases
(b) Decreases
(c) Does not change
(d) None of these

Ans. (c)

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Ques. CDT stands for __
(a) Company Direct Tax
(b) Corporate Dividend Tax
(c) Combined Direct Tax
(d) None of these

Ans. (b)

Ques. Amalgamation is done for __
(a) Eliminating competition
(b) Dominating the market
(c) Enjoying the benefits of large scale operation
(d) All of these

Ans. (d)

Ques. In __, an existing company’s financial structure is reorganized without liquidating the existing company and forming a new company.
(a) Amalgamation
(b) External reconstruction
(c) Absorption
(d) Internal reconstruction

Ans. (d)

Ques. In internal reconstruction, the existing company will be __
(a) Amalgamated
(b) Absorbed
(c) Liquidated
(d) None of these

Ans. (d)

Ques. When company converts its equity shares into capital stock, the account to be credited is __
(a) Equity share capital account
(b) Equity capital stock account
(c) No entry
(d) None of these

Ans. (b)

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Ques. In ……, a new company is formed to take over the business of an existing company which goes into liquidation.
(a) Amalgamation
(b) External reconstruction
(c) Absorption
(d) Internal reconstruction

Ans. (b)

Ques. ………… is a statutory reserve
(a) General Reserve
(b) Export profit reserve
(c) Dividend equalization reserve
(d) Capital Reserve

Ans. (b)

Ques. Capital of a company can be reduced by …………
(a) Authorization of Articles
(b) Passing of a special resolution
(c) Confirmation of court
(d) All of these

Ans. (d)

Ques. In case of consolidation of share capital, the total number of shares ………….
(a) Increases
(b) Decreases
(c) Does not change
(d) None of these

Ans. (b)

Ques. CRR stands for …………
(a) Current Reserve Ratio
(b) Capital Reserve Ratio
(c) Cash Reserve Ratio
(d) Capital Redemption Ratio

Ans. (c)

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Ques. Realisation Account is a …………..
(a) Real Account
(b) Personal Account
(c) Nominal Account
(d) Suspense Account

Ans. (c)

Ques. The liability of shareholders of a company is ___..
(a) Limited
(b) Unlimited
(c) Uncertain
(d) None of these

Ans. (a)

Ques. Authorised capital is called as……………
(a) Reserve capital
(b) Nominal Capital
(c) Capital Reserve
(d) Subscribed capital

Ans. (b)

Ques. Rebate on bills discounted is ………..
(a) An income accrued but not received
(b) A liability
(c) An expense
(d) Income received in advance

Ans. (d)

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