Unit No 3: Company Final Accounts MCQ (Multiple Choice Question)

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

 Unit No 3:

Company Final Accounts

MCQ (Multiple Choice Question)

1. Short-term Borrowings appear in a Company’s Balance Sheet under the head ___________

·      Current Assets

·      Current Liabilities

·      Non-Current Liabilities

·      Non-Current Assets

 

2. Goodwill appears in a Company’s Balance Sheet under the Sub-head ___________

·      Unamortized Assets

·      Non-Current Investment

·      Intangible Assets

·      Tangible Assets

 

3. Share Forfeiture Account appears in a Company’s Balance Sheet under the Sub-head _________

·      Share Capital

·      Reserve & Surplus

·      Contingent Liability

·      Commitments

 

4. Securities Premium Reserve appears in a Company’s Balance Sheet under_________

·      Share Capital

·      Long-term Provision

·      Short-term Provision

·      Reserve & Surplus

 

5. Prepaid Expenses appear in a Company’s Balance Sheet under the Sub-head ___________

·      Other Current Assets

·      Short-term Loans & Advances

·      Intangible Assets

·      Other Non-Current Assets

 

6. ___________ appear in a Company’s Balance Sheet under the Sub-head Short-term Provision

·      Interest Accrued but not due on Borrowings

·      Provision for Tax

·      Unpaid Dividend

·      Calls in Advance

 

7. Bills Receivables appear in a Company’s Balance Sheet under the Sub-head __________

·      Current Investments

·      Cash Equivalents

·      Trade Receivables

·      Short term Loans and Advances

 

8. Trade Investments appear in a Company’s Balance Sheet under the Sub-head ………………….

·      Current Investments

·      Non-Current Investments

·      Intangible Assets

·      Short-term Loans and Advances

 

9. ‘Claims against the Company not acknowledged as debts’ is shown under the head ……………….

·      Current Liabilities

·      Non-Current Liabilities

·      Commitments

·      Contingent Liabilities

10. Unclaimed dividend appears in a Company’s balance Sheet under the Sub-head___________

·      Short-term Borrowings

·      Trade Payables

·      Other Current Liabilities

·      Short-term Provisions

 

11. Interest accrued and due on debentures appear in a Company’s Balance Sheet under the Sub-head___________

·      Short-term Borrowings

·      Trade Payables

·      Other Current Liabilities

·      Short-term Provisions

 

12. Interest accrued but not due on loans appear in a Company’s Balance Sheet under the Sub-head _____________

·      Short-term Borrowings

·      Trade Payables

·      Other Current Liabilities

·      Short-term Provisions

13. 6% Debentures appear in a Company’s Balance Sheet under the Sub-head _____________

·      Long-term Provisions

·      Long-term Borrowings

·      Other Current Liabilities

·      Other Long-term Liabilities

 

14. Interest accrued on Investments appear in a Company’s Balance Sheet under the Sub-head ______________

·      Non-Current Investments

·      Current Investments

·      Other Current Assets

·      Other Non-Current Assets

 

15. ‘Accumulated Dividend Arrears’ on preference shares is shown in the Company’s Balance Sheet as_____________

·      Current Liability

·      Contingent Liability

·      Commitments

·      Short-term Provision

 

16. 50,000, 9% Debentures redeemable within 12 months of the date of Balance Sheet will be shown under________

·      Short-term Borrowings

·      Short-term Provision

·      Other Current Liability

·      Trade Payables

 

17. Which one of the following is Commitment?

·      Proposed Dividend

·      Interim Dividend

·      Unpaid/Unclaimed Dividend

·      Dividend Arrears on Cumulative Preference Shares

 

18. Which of the following items is shown under the head ‘Current Assets’ while preparing the Balance Sheet of a company?

·      Trade Investment

·      Underwriting Commission

·      Inventories

·      Livestock

 

19. While preparing the Balance Sheet of a company ‘Underwriting Commission’ is shown under which head?

·      Unamortized Expenditure

·      Current Assets

·      Non-Current Assets

·      Current Liability

 

20. Which of the following items is shown under the head ‘Current Liabilities’ while preparing the Balance Sheet of a company?

·      Securities Premium Reserve

·      Debentures

·      Livestock

·      None of the above

 

21. While preparing the Balance Sheet of a company ‘Securities Premium’ is shown under__________

·      Current Liability

·      Share Capital

·      Long-term Borrowings

·      None of the above

22. Which of the following items is shown under the head ‘Non-Current Assets’ while preparing the Balance Sheet of a company?

·      Underwriting Commission

·      Current Investment

·      Inventory

·      Patents

23. Under which heading the item ‘Bills Discounted but not yet matured’ will be shown in the Balance Sheet of a company?

·      Current Liability

·      Current Assets

·      Contingent Liabilities

·      Unamortized Expenditure

 

24. Which one of the following items is shown under the heading ‘current liabilities’ in the Balance Sheet of a company?

·      Investments

·      Reserve Fund

·      Unclaimed Dividend

·      Livestock

 

25. While preparing the Balance Sheet of a Company which item is shown under the head ‘Long term Borrowings’?

·      9% Debentures

·      Security Premium Reserve

·      Trade Payables

·      None of the above

 

26. Share Capital of a Company consists of 5,00,000 Shares of ₹10 each, ₹8 called up. All the shareholders have duly paid the called up amount. Share capital will be shown as ________

·      Subscribed and Fully Paid

·      Subscribed but not fully paid

·      Any of the above

·      None of the above

 

27. Change in Inventories means:

·      Difference between Opening Inventories and Closing Inventories

·      Difference between Closing Inventories and Opening Inventories

·      Difference between Opening Inventories and Closing Inventories, if Opening Inventories are higher

·      Difference between Closing Inventories and Opening Inventories, if Closing Inventories are higher.

28. Balance sheet of a company is required to be prepared in the format given in __________

·      Schedule III Part II

·      Schedule III Part I

·      Schedule III Part III

·      Table A

 

29. As per Companies Act, the Balance Sheet of a company is required to be presented in ………………………

·      Horizontal Form

·      Vertical Form

·      Either Horizontal or Vertical Form

·      Neither of the above

 

30. Which of the following is not required to be prepared under the Companies Act

·      Statement of Profit and Loss

·      Balance Sheet

·      Report of Director’s and Auditor’s

·      Funds Flow Statement

 

31. According to prescribed order of assets in a Company’s Balance Sheet _______________ assets should be shown first of all.

·      Non-Current Assets

·      Current Assets

·      Current Investments

·      Loans and Advances

 

32. Calls in Arrears appear in a Company’s Balance Sheet under __________

·      Reserve & Surplus

·      Shareholder’s Funds

·      Contingent Liabilities

·      Short-term Borrowings

 

33. Calls in advance appear in a Company’s Balance Sheet under __________

·      Share Capital

·      Current Liability

·      Long-term Borrowings

·      Reserve & Surplus

34. In a Company’s Balance Sheet __________ appear under the head ‘non-current assets’.

·      Goodwill

·      Patents

·      Vehicles

·      All of the above

 

35. Fixed Deposits appear in a Company’s Balance Sheet under:

·      Current Assets

·      Current Liabilities

·      Long-term Provisions

·      Long-term Borrowings

 

36. Expenses allowed on issue of shares appears in a Company’s Balance Sheet under:

·      Share Capital

·      Current Liability

·      Unamortized Expenditure

·      Contingent Liability

 

 37. A Company has issued 2,00,000 Equity Shares of ₹10 each and it has called the entire nominal value of the share. It has received the entire amount except final call of ₹3 per share on 5,000 shares. Subscribed Capital will be shown as follows:

 

(A)	Subscribed and fully paid 2,00,000 Equity Share of ₹ 10 each	20,00,000
	Less: Call in Arrears	-       15,000	19,85,000
(B)	Subscribed but not fully paid 2,00,000 Equity Share of ₹ 10 each	20,00,000
	Less: Call in Arrears	-       15,000	19,85,000
(C)	Subscribed and fully 1,95,000 Equity Share of ₹ 10 each		19,50,000
	Subscribed but not fully paid 5,000 Equity Share of ₹ 10 each	50,000
	Less: Call in Arrears	-       15,000	+ 35,000
			19,85,000
(D)	Can be shown as (B) or as (C)

 

38. As per Schedule VI of the Companies Act, 1956, under which of the following heads is 'Premium on issue of Preference Shares' shown in the Balance Sheet of a company?

·      Share Capital

·      Non-Current Liabilities

·      Reserves and Surplus

·      Current Liabilities

 

39. Which of the following is a fixed asset

·      Loose tools A/C

·      Stores and Spares A/C

·      Office Equipment A/C

·      Remittance in transit A/C

 

40. In Balance Sheet Computer software is shown under the

·      Fixed Intangible Assets

·      Fixed Tangible Assets

·      Fictitious Assets

·      Current Assets

 

41. Those liabilities which may or may not arise as they are dependent on happening in future.

·      Contingent Liability

·      Current Liability

·      Provisions

·      Reserve & surplus

 

42. A company prepares its Balance Sheet as per the format in 2021

·      Schedule VI of the Indian Companies Act, 2013

·      Schedule II of the Indian Companies Act, 2013

·      Schedule IV of the Indian Companies Act, 2013

·      None of the options

 

43. With the permission of Registrar accounting period can beextended up to

·      18 Months

·      13 Months

·      14 Months

·      15 Months

 

44. Preliminary expenses include______

·      Legal cost

·      Professional fees

·      Stamp duty

·      All of the options

 

45. Preliminary expenses are shown in the balance sheet.

·      Assets side

·      Liabilities side

·      Assets side and Liabilities side

·      None of the options

 

46. Which are written off every year from the profits earned by the business.

·      Preliminary Expenses

·      Liabilities

·      Preliminary Expenses and Liabilities

·      None of the options

 

47. Which Indian Companies Act is in force these days

·      Companies Act 2013

·      Indian Companies Act 1956

·      Indian Companies Act 2015

·      Indian Companies Act 2014

 

48. Which of the following is a fictitious Asset?

·      Preliminary Expense

·      Goodwill

·      Land & building

·      None of the options

 

50. The basic equation on which a profit & loss statement is based is

·      Revenues - Expenses = Profit

·      Revenues + Expenses = Profit

·      Revenues - Expenses = Profit and Revenues + Expenses = Profit

·      None of the options

 

51. The profit & loss statement is also known as the

·      Income Statement

·      Statement of Earning

·      Statement of Operation

·      All of the options

 

52. The profit & loss statement summarizes the

·      Revenues and expenses

·      Assets and Liabilities

·      Revenues and expenses and Assets and Liabilities

·      None of the options

 

53. ______is a Current Liability.

·      Sundry Creditors

·      Drawings

·      Prepaid Insurance

·      Sundry Debtors

 

54. Record all the debit balances of real and personal accounts in the

·      Assets side of the balance sheet

·      Liability side of the balance sheet

·      Assets side of the balance sheet and Liability side of the balance sheet

·      None of the options

 

55. Financial statements reflect a combination of

·      Recorded facts

·      Accounting conventions

·      Personal judgments

·      All of the options

 

56. Assets which are converted into cash within an operating cycle is known as

·      Current Assets

·      Fixed Assets

·      Intangible Assets

·      None of the options

57. Fixed Assets are_______

·      Land and Building

·      Plant and Machinery

·      Motor Car

·      All of the options

 

58. Those assets that are used for more than one year are called

·      Fixed Assets

·      Current Assets

·      Current Liabilities

·      All of the options

 

60. Current Liabilities are those liabilities which are liable to pay with in an operating cycle generally one year

·      Current Liabilities

·      Current Assets

·      Reserves and Surplus

·      None of the options

 

61. Profit and loss account is also called_____statement

·      Income

·      Capital

·      Loss

·      None of the options

 

62. Financial statements are the ______of information to interested parties.

·      Basic Source

·      External Source

·      Basic Source and External Source

·      None of the options

 

63. Financial statements are primarily directed towards the needs of

·      Owners

·      Customers

·      Banks

·      None of the options

 

64. Which includes in Trade Receivables

·      Debtors

·      Creditors

·      Bills Payable

·      None of the options

 

65. Inventories include the following are

·      Raw Material

·      Work in progress

·      Goods acquired for trading

·      All of the options

 

66. According to prescribed order of assets in a Company’s Balance Sheet __________ assets should be shown first of all.

·      Non-Current Assets

·      Current Assets

·      Current Investments

·      Loans and Advances