MCQs on Company Accounts

The following questions are all from the previous year CBSE question papers. Students can have idea of the level and type of questions asked in examination, to prepare well for the coming final exam.

Question 1:

Alfa Ltd. invited applications for 50,000 equity shares of ₹10 each at a premium of 30%. The whole amount was payable on application. Applications were received for 2,50,000 shares. The company decided to allot the shares on a pro-rata basis to all the applicants. The amount refunded by the company was:

  1. ₹32,50,000
  2. ₹15,60,000
  3. ₹39,00,000
  4. *₹26,00,000

 

Question 2:

Reserve capital is that part of _________ capital which cannot be called except at the time of winding up of the company.

  1. Issued
  2. Called up
  3. *Uncalled
  4. Nominal

 

Question 3:

Xeno Ltd. issued 25,000 equity shares of ₹0 each. The amount was payable as follows: On Application ₹4 per share, On Allotment ₹5 per share, On First and Final call Balance All the shares offered were applied for and allotted. All the money due on allotment was received except on 1,500 shares. These shares were forfeited immediately after allotment. First and final call was not yet made. At the time of forfeiture, Share Capital Account will be debited by:

  1. ₹15,000
  2. ₹24,000
  3. *₹13,500
  4. ₹18,000

 

Question 4:

Assertion (A) : Irredeemable debentures are also known as perpetual debentures.

Reason (R) : The company does not give any undertaking for the repayment of money borrowed by issuing such debentures. They are repayable on the winding up of the company or on the expiry of a long period.

  1. *Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
  2. Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
  3. Assertion (A) is incorrect, but Reason (R) is correct.
  4. Assertion (A) is correct, but Reason (R) is incorrect.

 

Question 5:

Money received in advance from shareholders before it is actually called up by the directors is:

  1. *debited to calls in advance account
  2. credited to calls in advance account
  3. debited to share capital account
  4. credited to share capital account

 

MCQs on Company Accounts

Question 6:

An offer of securities or invitation to subscribe securities to a select group of persons is termed as:

  1. Buy back of shares
  2. Employee stock option plan
  3. *Private placement of shares
  4. Sweat Equity

 

Question 7:

A share of ₹100 on which ₹80 is received is forfeited for non-payment of final call of ₹20. The minimum price at which this share can be reissued is:

  1. ₹120
  2. ₹100
  3. ₹80
  4. *₹20

 

Question 8:

Shiv Ltd. forfeited 500 shares of ₹10 each on which ₹7 per share was paid. These shares were reissued for ₹9 per share fully paid. Amount transferred to Capital Reserve Account will be:

  1. *₹3000
  2. ₹5000
  3. ₹4500
  4. ₹3500

 

Question 9:

If a share of ₹100 on which ₹70 has been paid is forfeited, then at which minimum price can it be re-issued ?

  1. ₹100
  2. *₹30
  3. ₹70
  4. ₹130

 

Question 10:

If a share of ₹10 issued at a premium of ₹2 per share, on which ₹8 (including premium) has been called and ₹6 (including premium) has been paid by the shareholder, is forfeited, then Share Capital Account will be debited with :

  1. ₹10
  2. ₹4
  3. ₹8
  4. *₹6

 

MCQs on Company Accounts

Question 11:

On 1st April 2022, Mega Ltd. issued 30,000, 10% Debentures of ₹100 each at a discount of 10%. The total amount of interest due on debentures for the year ending 31st March 2023 will be:

  1. ₹2,70,000
  2. *₹3,00,000
  3. ₹27,000
  4. ₹30,000

 

Question 12:

Maharaja Ltd. took over assets of ₹15,00,000 and liabilities of ₹2,00,000 of Dolphin Ltd. for an agreed purchase consideration of ₹12,60,000. It was agreed that the purchase consideration will be paid by issuing 11% Debentures of ₹100 each at 10% discount. The number of debentures issued will be:

  1. 13,000
  2. 12,600
  3. 10,000
  4. *14,000

 

Question 13:

Misha Ltd. issued 6,000, 8% Debentures of ₹100 each at ₹96 per debenture. 8% Debentures Account will be credited by:

  1. ₹5,76,000
  2. ₹24,000
  3. *₹6,00,000
  4. ₹60,000

 

Question 14:

Nominal/Authorized share capital is:

  1. that part of the share capital which is issued by the company.
  2. the amount of share capital which is actually applied for by the prospective shareholders.
  3. *The maximum amount of share capital which a company is authorized to issue.
  4. the amount actually paid by the shareholders.

 

Question 15:

The debentures which do not have a specific charge on the assets of the company are called:

  1. Redeemable Debentures
  2. *Unsecured Debentures
  3. Zero Coupon Rate Debentures
  4. Non-Convertible Debentures

 

MCQs on Company Accounts

Question 16:

Alfa Ltd. offered for public subscription 50,000 equity shares of ₹10 each at ₹110 per share. The entire amount was payable on application. Applications were received for 48,000 shares and allotment was made to all the applicants. The amount received on application will be:

  1. *₹52,80,000
  2. ₹55,00,000
  3. ₹50,00,000
  4. ₹48,00,000

 

Question 17:

Assertion (A): When the shares are forfeited, share capital account is debited with the amount called up and credited to (i) respective unpaid calls account i.e., calls in arrears and (ii) share forfeiture account with the amount already received on shares.

Reason (R): When the shares are forfeited, all entries relating to the shares forfeited, except those relating to securities premium, already recorded in accounting records must be reversed.

Choose the correct option from the following:

  1. *Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).
  2. Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
  3. Assertion (A) is incorrect, but Reason (R) is correct.
  4. Assertion (A) is correct, but Reason (R) incorrect.

 

Question 18:

Lexa Ltd. issued 50,000 equity shares of ₹10 each at a premium of ₹2 per share. The amount was payable as follows:

On application and allotment ₹7 per share (including premium)

On first and final call Balance

The issue was fully subscribed. All the money was duly received except the first and final call on 1,000 equity shares. These shares were forfeited. On forfeiture of these shares Calls in Arrears Account will be:

  1. credited by ₹7,000
  2. debited by ₹5,000
  3. *Credited by ₹5,000
  4. debited by ₹7,000

 

Question 19:

Minimum subscription for allotment of shares as per Securities and Exchange Board of India (SEBI) guidelines cannot be less than 90% of which of the following capital?

  1. Reserve Capital
  2. Nominal Capital
  3. Subscribed Capital
  4. *Issued Capital

 

Question 20:

KLB Ltd. forfeited 3,000 shares of 10 each, ₹8 per share called up for non-payment of first call of ₹2 per share. All these shares were reissued at ₹7 per share, ₹8 paid up. The amount transferred to Capital Reserve Account will be:

  1. ₹18,000
  2. ₹24,000
  3. *₹15,000
  4. ₹3,000

 

MCQs on Company Accounts

Question 21:

NUK Ltd. forfeited 1,000 shares of ₹10 each, fully called up for non-payment of final call of ₹2 per share. 800 of these shares were reissued at ₹11 per share fully paid. The amount credited to Capital Reserve Account will be:

  1. *₹6,400
  2. ₹8,000
  3. ₹7,200
  4. ₹10,000

 

Question 22:

The debentures which do not carry a specific rate of interest are called:

  1. *Zero Coupon Rate Debentures
  2. Specific Coupon Rate Debentures
  3. Unsecured Debentures
  4. Secured Debentures

 

Question 23:

Beeta Ltd. offered for subscription 1,00,000 equity shares of ₹ 10 each at a premium of 100% payable entirely on application. Applications were received for 5,00,000 equity shares. The company decided to allot the shares on pro-rata basis to all the applicants. The amount received by the company on application was:

  1. *₹ 1,00,00,000
  2. ₹ 20,00,000
  3. ₹ 1,20,00,000
  4. ₹ 80,00,000

 

Question 24:

The amount of share capital which a company is authorized to issue by its Memorandum of Association is called:

  1. Issued capital
  2. Subscribed capital
  3. Reserve capital
  4. *Nominal capital

 

Question 25:

Sinoy Ltd. issued 20,000 shares of ₹ 10 each at a premium of ₹ 6. The amount was payable as follows:

On Application – ₹ 7 per share (Including Premium ₹ 1 per share)

On Allotment – ₹ 5 per share (Including Premium ₹ 2 per share)

On First and Final call – Balance

The issue was fully subscribed. All the money was duly received except the allotment and first and final call on 1,000 shares. These shares were forfeited. On forfeiture of these shares, the ‘Securities Premium Account’ will be debited by:

  1. ₹ 2,000
  2. ₹ 3,000
  3. *₹ 5,000
  4. ₹ 20,000

 

MCQs on Company Accounts

Question 26:

Money not received from shareholders on allotment or calls is:

  1. debited to calls in advance account.
  2. credited to calls in advance account.
  3. *Debited to calls in arrears account.
  4. credited to calls in arrears account.

 

Question 27:

Those debentures where a charge is created on the assets of the company for the purpose of payment in case of default are known as:

  1. *Secured Debentures
  2. Registered Debentures
  3. Specific Coupon Rate Debentures
  4. Redeemable Debentures

 

Question 28:

Nagar Ltd. issued 6,000, 11% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium. ‘Discount on issue of debentures’ and ‘Premium on redemption of debentures’ were accounted for through ‘Loss on issue of debentures account’. If the amount of ‘Loss on issue of debentures’ was ₹90,000, then the amount of premium on redemption of debentures was:

  1. ₹ 60,000
  2. ₹ 90,000
  3. ₹ 1,20,000
  4. *₹ 30,000

 

Question 29:

On 1st April 2022 Surya Ltd. issued 10,000, 12% Debentures of ₹ 100 each at a premium of 5%. The total amount of interest on debentures for the year ended 31st March 2023 will be:

  1. *₹ 1,20,000
  2. ₹ 50,000
  3. ₹ 1,00,000
  4. ₹ 1,26,000

 

Class 12 Accountancy MCQs Share Capital

Class 12 Accountancy MCQs Debentures