A 'Shell Company' is a term used for: MCQ with Answer and Explanation

Question

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A 'Shell Company' is a term used for:

A. A listed company

B. A company with no active business or significant assets

C. A company with substantial assets

D. A government company

Answer: Option B

Solution (By JKSSB Mock Tests)

Shell companies exist mainly on paper with no significant operations or assets, often used for illicit activities.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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In BRS, if the cash book shows a bank balance of ₹10,000 (Dr.) and there is an unpresented cheque of ₹2,000, the passbook balance will be:

A. ₹10,000

B. ₹2,000

C. ₹8,000

D. ₹12,000

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Correct Answer: Option D

Explanation:
Unpresented cheque has been deducted in cash book but not in passbook. So passbook balance = Cash book balance + Unpresented cheque = 10,000 + 2,000 = ₹12,000.

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Question #2

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The 'Income Tax Refund' received is:

A. Deferred revenue

B. Liability

C. Capital receipt

D. Revenue receipt

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Correct Answer: Option D

Explanation:
Income tax refund is a revenue receipt as it pertains to business profits.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

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Under FEMA, current account transactions are:

A. Generally permitted, subject to certain restrictions

B. Only allowed for exporters

C. Only allowed for government

D. Prohibited

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Correct Answer: Option A

Explanation:
Current account transactions are generally free unless specifically restricted.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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