Unit No 2: Profits Prior to Incorporation MCQ (Multiple Choice Question)

 Corporate Accounting – I Course Code 232 (Semester – III)

 Unit No 2:

Profits Prior to Incorporation 

MCQ (Multiple Choice Question)

 

 1. Bank charges is allocated on the bases of

·      Sales ratio.

·      Weighted ratio.

·      Time ratio.

·      None of these.

 

2. Bad debts if it is given period wise is allocated

·      Actual period ratio.

·      Capital profit.

·      Profit or loss after incorporation.

·      None of these.

 

3. Discount on issue debentures is allocated only

·      Prior incorporation.

·      Post incorporation.

·      Above the both.

·      None of these.

 

 4. Interest on partner’s expenses charged only

·      Prior incorporation.

·      Post incorporation

·      Revenue profit.

·      None of these.

 

5. Delivery expenses is allocated on the bases of

·      Sales ratio.

·      Time ratio.

·      Prior incorporation.

·      None of these.

 

6. The profit of post incorporation period is called;

·      Revenue profit

·      capital profit

·      Both a & b

·      none of the above

 

7. Salesmen’s commission is divided in profit prior to incorporation according to

·      Turnover Ratio

·      Time Ratio

·      Post incorporation period

·      Pre incorporation period

 

8. Director’s remuneration is calculated on the basis of,

·      Turnover Ratio

·      Time Ratio

·      Post incorporation period

·      Pre incorporation period

 

9. If there is a loss prior to incorporation, it will be debited to

·      General Reserve A/c

·      Profit and Loss A/c

·      Capital Reserve Account

·      None of the Above

 

10. Audit fees in general is to be treated as __________expenses.

·      Turnover Ratio

·      Time Ratio

·      Post incorporation

·      Pre incorporation period

 

11. A private company can start business on the receipt of the _____

·      Revenue profit

·      Capital profit

·      Certificate of Incorporation.

·      None of the above

 

12. Which of the following expenses is not distributed based on time.

·      Rent

·      Salary

·      Stationery expenses

·      None of the above.

 

13. Net profit is get divided into;

·      Capital Profit

·      Revenue Profit

·      Both a & b

·      None of the above

 

14. For which purpose profits prior to incorporation may not be used?

·      To write off capital loss.

·      To create capital reserve.

·      To write off goodwill.

·      To distribute dividend.

 

15. Asha ltd issues 30000, 6% debenture underwritten by Rachna Ltd. 30%. Shashi Ltd 30% and Arun Ltd 20%. Market applications for 24000debentures were received. What will be the liability of underwriters?

·      1400, 1600, 1600

·      1800,1800,1200

·      1600,1600,1400

·      2000,2000,800

16. Profit prior to incorporation is transferred to

·      General Reserve

·      Capital Reserve

·      Profit and loss account

·      None of the above

 

17. The profit earned by the company from the date of purchase to the date of incorporation is

·      Pre-incorporation profit

·      Post-incorporation profit

·      Notional profit

·      None of the above

 

18. Loss prior to incorporation is debited to which account?

·      Goodwill account

·      Loss prior to incorporation account

·      Both

·      None of the above

  

19. Profit Prior to incorporation can be utilized for __________

·      Writing off Fixed Assets acquired

·      Writing off Goodwill

·      Writing off Preliminary Expenses

·      All of the above

 

20. Post-incorporation profit can be utilized for __________

·      Dividend to shareholders

·      Interest paid to vendor

·      Writing off goodwill

·      None of the above

 

21. All fixed expenses which not vary with sales are to be allocate on the basis of _______

·      Time Ratio

·      Sale Ratio

·      Equally

·      None of the above

 

 22. Audit Fees is to be allocate on the basis of __________

·      Time Ratio

·      Sale Ratio

·      Equally

·      None of the above

 

23. Discount Allowed is to be allocate on the basis of ________

·      Time Ratio

·      Sale Ratio

·      Equally

·      None of the above

 

24. Carriage outward is to be allocate on the basis of ________

·      Time Ratio

·      Sale Ratio

·      Equally

·      None of the above

  

25. Partners salary is to be allocate on the basis of ____________

·      Time Ratio

·      Sale Ratio

·      Pre - Incorporation Period

·      Post - Incorporation Period

 

26. Underwriting Commission is to be allocate on the basis of ________

·      Time Ratio

·      Sale Ratio

·      Pre - Incorporation Period

·      Post - Incorporation Period

27. Preliminary Expenses is to be allocate on the basis of _______

·      Time Ratio

·      Sale Ratio

·      Pre - Incorporation Period

·      Post - Incorporation Period

  

28. Provision for Taxation is to be allocate on the basis of _______

·      Time Ratio

·      Sale Ratio

·      Pre - Incorporation Period

·      Post - Incorporation Period

 

29. Discount Received is to be allocate on the basis of _______

·      Time Ratio

·      Sale Ratio

·      Purchase Ratio

·      Post-Incorporation Period

 

30. Shares Transfer Fees is to be allocate on the basis of _________

·      Time Ratio

·      Sale Ratio

·      Pre - Incorporation Period

·      Post - Incorporation Period

  

31. Interest received on Investment is to be allocate on the basis of ____

·      Time Ratio

·      Sale Ratio

·      Pre - Incorporation Period

·      Post - Incorporation Period

 

32. Free Sample is to be allocate on the basis of _________

·      Time Ratio

·      Sale Ratio

·      Pre - Incorporation Period

·      Post - Incorporation Period

 

33. Total Turnover for the year ending was Rs. 10,00,000 and the sales up to date of incorporation was Rs. 4,00,000. Find out the sale ratio?

·      2:3

·      3:2

·      1:2

·      2:1

 

 34. XYZ Ltd was incorporated on 1st May 2020 to take over the business of Mr.Patil from 1st January 2020. The Year ended on 31st December 2020. Find out Time Ratio?

·      1:2

·      2:1

·      1:3

·      3:1

 

35. ABC Ltd was incorporated on 1st July 2019 to take over the running business of M/s jadhav and Sons with effect from 1st April 2019. The year ended on 31st March 2020. Find out Time Ratio?

·      1:2

·      2:1

·      1:3

·      3:1

 

36. ABC Ltd was incorporated on 1st July 2019 to take over the running business of M/s jadhav and Sons with effect from 1st April 2019. The year ended on 31st March 2020. The average Monthly sales from 1st July 2019 was double than that of the previous months. Find out Sales Ratio?

 

·      1:6

·      2:6

·      1:5

·      2:5

 

37. Gross Profit is to be allocate on the basis of __________

·      Time Ratio

·      Sale Ratio

·      Equally

·      None of These

 

38. Fixed portion of expenses is to be allocate on the basis of ________

·      Time Ratio

·      Sale Ratio

·      Equally

·      None of These

 

39. Transfer loss relating to pre-incorporation period __________

·      Goodwill Account

·      Capital Reserve Account

·      Revenue Reserve Account

·      None of these