Accountancy and Book Keeping MCQs

Accountancy and Statistics

Accountancy and Book Keeping MCQs

Practice the latest Accountancy MCQs with answers and detailed explanations. Explore chapter-wise multiple-choice questions covering important accounting concepts, bookkeeping, financial statements, journal entries, ledger, trial balance, depreciation, ratio analysis, partnership accounts, company accounts, and more. Perfect for Class 11 & 12, B.Com, CA Foundation, CUET, Banking, SSC, JKSSB, JKPSC and competitive exams.

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Total Questions

Practice Questions

Page 34 of 94
Question #661
Which of the following is not a feature of a company?
A. Unlimited liability
B. Common seal
C. Separate legal entity
D. Perpetual succession
Discuss
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Correct Answer: Option A

Explanation:
Company has limited liability, not unlimited.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #662
The minimum number of members in a private company is:
A. 2
B. 7
C. 3
D. 10
Discuss
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Correct Answer: Option A

Explanation:
Private company requires minimum 2 members.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #663
The maximum number of members in a public company is:
A. 200
B. No limit
C. 50
D. 100
Discuss
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Correct Answer: Option B

Explanation:
Public company has no maximum limit on number of members.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #664
'Securities Premium' can be used for:
A. Distribution of dividend
B. Purchase of stock
C. Payment of salary
D. Writing off preliminary expenses
Discuss
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Correct Answer: Option D

Explanation:
Securities premium can be used for purposes specified in Section 52 of Companies Act, like issue of bonus shares, writing off preliminary expenses, etc.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #665
The rate of interest on calls-in-advance as per Table F is:
A. 10%
B. 5%
C. 6%
D. 12%
Discuss
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Correct Answer: Option D

Explanation:
As per Table F of Companies Act, interest on calls in advance is 12% p.a.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #666
The maximum rate of interest on calls-in-arrears is:
A. 12%
B. 6%
C. 5%
D. 10%
Discuss
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Correct Answer: Option D

Explanation:
Table F prescribes maximum 10% p.a. on calls in arrears.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #667
'Calls-in-Arrears' is shown in Balance Sheet by:
A. Deducting from called-up capital
B. Separate liability
C. Adding to share capital
D. Contingent liability
Discuss
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Correct Answer: Option A

Explanation:
Calls-in-arrears is shown as deduction from called-up capital.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #668
A company issued 10,000 shares of ₹10 each at par, payable ₹2 on application, ₹3 on allotment, ₹5 on call. A shareholder holding 500 shares failed to pay call money. Calls-in-arrears amount is:
A. ₹1,000
B. ₹2,500
C. ₹5,000
D. ₹1,500
Discuss
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Correct Answer: Option B

Explanation:
Call money unpaid = 500 shares * ₹5 = ₹2,500.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #669
The 'Forfeiture of Shares' results in:
A. Creation of reserve
B. No change
C. Reduction of share capital
D. Increase of share capital
Discuss
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Correct Answer: Option C

Explanation:
Forfeiture reduces the share capital by the amount called up, and creates a forfeited shares account (temporary).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #670
After reissue of forfeited shares, the balance in 'Shares Forfeited Account' is transferred to:
A. General Reserve
B. Securities Premium
C. Capital Reserve
D. Profit & Loss
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Correct Answer: Option C

Explanation:
Any profit on reissue (excess of forfeited amount over reissue loss) is transferred to Capital Reserve.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #671
'Bonus Shares' are issued by:
A. Fresh issue to public
B. Capitalizing reserves
C. Private placement
D. Rights issue
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Correct Answer: Option B

Explanation:
Bonus shares are issued to existing shareholders without consideration, by capitalizing reserves.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #672
The 'Rights Issue' is offered to:
A. Employees
B. Existing shareholders in proportion to their holding
C. Promoters
D. Public
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Correct Answer: Option B

Explanation:
Rights shares are offered to existing equity shareholders on a pro-rata basis.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #673
The 'Redemption of Preference Shares' can be made out of:
A. Capital reserve
B. Fresh issue of shares
C. Profits available for distribution
D. Both A and B
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Correct Answer: Option D

Explanation:
Redemption can be out of profits or proceeds of fresh issue.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #674
The 'Capital Redemption Reserve' is created when preference shares are redeemed out of:
A. Profits
B. Proceeds of fresh issue
C. Securities premium
D. General reserve
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Correct Answer: Option A

Explanation:
When redemption is out of profits, an equivalent amount is transferred to Capital Redemption Reserve.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #675
Which of the following is a 'Non-Cash Expense'?
A. Depreciation
B. Salaries paid
C. Commission paid
D. Rent paid
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Correct Answer: Option A

Explanation:
Depreciation is a non-cash expense as there is no outflow of cash.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #676
The 'Deferred Tax Asset' arises when:
A. Accounting income is less than taxable income
B. Income tax is refunded
C. Accounting income is more than taxable income
D. Tax rate increases
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Correct Answer: Option A

Explanation:
Deferred tax asset is recognized when accounting profit is lower than taxable profit due to timing differences, resulting in future tax savings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #677
'Dividend' can be paid out of:
A. Securities premium
B. Capital
C. Borrowed funds
D. Current year's profits or accumulated profits
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Correct Answer: Option D

Explanation:
Dividend is paid only out of profits.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #678
The 'Interim Dividend' is declared by:
A. Auditors
B. Shareholders
C. Board of Directors
D. Government
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Correct Answer: Option C

Explanation:
Interim dividend can be declared by the Board of Directors between annual general meetings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #679
The 'Final Dividend' is recommended by:
A. Registrar
B. Shareholders
C. Auditors
D. Board of Directors
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Correct Answer: Option D

Explanation:
Board recommends final dividend, which is then approved by shareholders in AGM.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #680
'Unclaimed Dividend' is shown in Balance Sheet as:
A. Current liability
B. Contingent liability
C. Reserve
D. Current asset
Discuss
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Correct Answer: Option A

Explanation:
Unclaimed dividend is a liability until paid or transferred to IEPF.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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