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

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A 'Shell Company' is a term used for:

A. A government company

B. A company with no active business or significant assets

C. A company with substantial assets

D. A listed 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

The 'Securities and Exchange Board of India' (SEBI) regulates:

A. Commodity futures only

B. Insurance market

C. Banking

D. Capital markets and securities

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Correct Answer: Option D

Explanation:
SEBI is the regulator for securities market in India.

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

Question #2

Which of the following is not a purpose of financial audit?

A. Preparing financial statements

B. Ensuring compliance with laws

C. Detecting fraud and error

D. Expressing opinion on true and fair view

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Correct Answer: Option A

Explanation:
Preparation of financial statements is management's responsibility. Auditor expresses opinion on them.

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

Question #3

If the purchase of a printer for ₹12,000 is recorded in the purchases book, the error is:

A. Error of principle

B. Error of commission

C. Compensating error

D. Error of omission

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Correct Answer: Option A

Explanation:
Printer is an asset, should be capitalised. Recording in purchases book treats it as expense, violating accounting principles.

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

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