Financial Statements 1 Test 40

Result

Financial Statements 1 Test 40

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

Which of the following amounts shall be credited to Investor Education and Protection Fund, if they remain unpaid/unclaimed for seven years from the date they become due?

A
Matured debentures of a company

B
Tax arrears

C
Proceeds of sale property

D
Provision for doubtful debts

Solution

Investor Education and Protection Fund (IEPF) is for promotion of investors’ awareness and protection of the interests of investors.
Investor Education and Protection Fund (IEPF) has been set-up under Section 205C of the Companies Act, 1956 by way of the Companies (Amendment) Act, 1999. As per the Act, the following amounts which have remained unclaimed and unpaid for a period of seven years from the date they became due for payment shall be credited to the IEPF:-
(a) Unpaid dividend accounts of the companies;
(b) The application moneys received and due for refund;
(c) Matured deposits;
(d) The interest accrued in the amounts referred to in clauses (a) to (d);
(e) matured debentures;
(f) Grants and donations by the Central Govt., State Govt., companies or any other institutions ;
(g) The interest or other income received out of the investments made from the fund.
Question 2
1 / -0

Arrange the following liabilities in the order of company balance sheet.
i) Bank Overdraft
ii) Bank Loan
iii) Share Capital
iv) Provision for Taxation

A
i, ii, iii, iv

B
iv, iii, ii, i

C
iii, ii, i, iv

D
iii, ii, iv, i

Solution

Assets and liabilities are to be shown in the balance sheet in an order. There are two ways of showing the items of assets & liabilities i.e. Order of permanency and order of liquidity. This is also called as marshaling of balance sheet.
Accordingly , items to be shown as :

Share Capital
Bank Loan
Bank Overdarft
Provision for Taxation.
Question 3
1 / -0

Who among the following is a bear operator?

A
A stock broker who sells shares now and buys the same shares later.

B
An investor who expects the price of a security or that of the whole securities market to rise.

C
An investor who sells securities anticipation of being able to repurchase them later at a lower price.

D
A broker who indulges in rigging of share prices.
Question 4
1 / -0

Which one of the following securities cannot be issued by a public limited company in India?

A
Participating preference shares.

B
Redeemable preference shares.

C
Deferred shares.

D
Debentures.

Solution

A deferred share is a share that does not have any rights to the assets of a company undergoing bankruptcy until all common and preferred shareholders are paid. It may also be a share that is issued to company founders that restricts their receipt of dividends until dividends have been distributed to all other classes of shareholder.
In India deferred shares were issued prior to 1956.The Companies Act, 1956 prohibited public limited companies to have these shares and hence these securities cannot be issued by a public limited company in India.
Question 5
1 / -0

What is the effect of drawing on capital account?

A
Increase capital balance

B
Decrease capital balance

C
Neutralize capital balance

D
None of the above

Solution

Business Entity concept defines that business and businessman are two separate entities in the eye of law. Hence anything contributed by the owner as capital in the business is treated as liability.

Same way, if anything is withdrawn by the owner for personal purposes are considered as drawings and it decreases the capital of the owner.
Question 6
1 / -0

Which one of the following statements is correct?

A
Capital of a firm is reduced by borrowing.

B
When there is no change in proprietor's capital it is an indication of loss in business.

C
Nominal accounts refer to false transaction.

D
Real accounts relate to assets of a business.

Solution

Accounts are classified as Personal , Real and Nominal Account.

Personal Account are the account of person which includes artificial person also. Like account of Ram, XYZ & Sons, PKD Pvt. Ltd. etc.

Real Account are related to the things or assets of the business. Like goods, building, furniture etc.

Nominal Account are related to the account of expenses , losses and incomes and gains.
Question 7
1 / -0

A limited company has to redeem redeemable preference shares of the value of Rs. $$1,00,000$$ for which the company has issues $$3000$$ equity shares of Rs. $$10$$ each at a premium of $$10\%$$. The amount to be transferred to capital redemption reserve account will be.

A
Rs. $$1,00,000$$

B
Rs. $$97,000$$

C
Rs. $$70,000$$

D
Rs. $$67,000$$

Solution

If the preference shares are redeemed out of accumulated profit, it will be necessary to transfer an amount equal to the amount repaid on the redemption to Capital Redemption Reserve Account. If the company issues any fresh shares for redemption purpose, the transferred amount will be the difference between nominal value of shares redeemed and the nominal value of shares issued (i.e. amount transferred to CRR = Nominal value of shares redeemed – Nominal value of shares issued). The capital redemption reserve account can be used for issuing fully paid bonus shares.
Therfore, amount to be transferred to capital redemption reserve account will be Rs. 70000.
Question 8
1 / -0

A particular firm provided the following data for an accounting year:
Current ratio = $$2.5:1$$
Liquid ratio = $$1.5:1$$
Net working capital = $$Rs. 6,00,000$$
Current assets and current liabilities of the firm respectively will be _____________.

A
$$Rs.9,00,000$$ and $$Rs.3,00,000$$

B
$$Rs.10,00,000$$ and $$Rs.4,00,000$$

C
$$Rs.8,50,000$$ and $$Rs.2,50,000$$

D
$$Rs.7,50,000$$ and $$Rs.1,50,000$$

Solution

Working Capital is defined as
Current Assets - Current Liabilities = Net Working Capital

Current Ratio = Current Assets / Current Liabilities

Liquid Ratio = Liquid Assets / Current Liabilities

Current Ratio 2.5 : 1 signifies that for every Re.1 of current liability, firm is having a current assets of Rs.2.5

That means net working capital = Current Assets - Current Liabilities
Rs.600000 = 2.5 - 1
Rs.600000 = 1.5
Hence working capital of Rs.600000 is equal to 1.5

Therefore Current Assets = Rs.600000/1.5 * 2.5
Current Assets = Rs.1000000

Current Liabilities = Rs.600000/1.5 * 1
Current Liabilities = Rs.400000
Question 9
1 / -0

A business has assets of $$Rs.45,700$$ and owner's equity $$Rs.13,200$$. What is the amount of liabilities?

A
$$Rs.32,500$$

B
$$Rs.57,522$$

C
$$Rs.44,312$$

D
None of these.

Solution

Accounting Equation is a s follows:
Owner's Equity + Liabilities = Total Assets
Rs.13200 + Liabilities = Rs.45700

Therefore,
Liabilities = Rs.45700 - Rs.13200
Liabilities = Rs. 32500
Question 10
1 / -0

Owner's equity stands of __________.

A
Fixed assets minus fixed liabilities

B
Fixed assets minus current liabilities

C
Current assets minus fixed liabilities

D
Total assets minus total liabilities

Solution

Accounting Equation is defined as:
Owner's Equity + Total Liabilities = Total Assets

Therefore,
Owner's Equity = Total Assets - Total Liabilities

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Financial Statements 1 Test 40

Result

Financial Statements 1 Test 40

Score

-

Rank

-

SHARING IS CARING

Question 1

Matured debentures of a company

Tax arrears

Proceeds of sale property

Provision for doubtful debts

Solution

Question 2

i, ii, iii, iv

iv, iii, ii, i

iii, ii, i, iv

iii, ii, iv, i

Solution

Question 3

A stock broker who sells shares now and buys the same shares later.

An investor who expects the price of a security or that of the whole securities market to rise.

An investor who sells securities anticipation of being able to repurchase them later at a lower price.

A broker who indulges in rigging of share prices.

Question 4

Participating preference shares.

Redeemable preference shares.

Deferred shares.

Debentures.

Solution

Question 5

Increase capital balance

Decrease capital balance

Neutralize capital balance

None of the above

Solution

Question 6

Capital of a firm is reduced by borrowing.

When there is no change in proprietor's capital it is an indication of loss in business.

Nominal accounts refer to false transaction.

Real accounts relate to assets of a business.

Solution

Question 7

Rs. $$1,00,000$$

Rs. $$97,000$$

Rs. $$70,000$$

Rs. $$67,000$$

Solution

Question 8

$$Rs.9,00,000$$ and $$Rs.3,00,000$$

$$Rs.10,00,000$$ and $$Rs.4,00,000$$

$$Rs.8,50,000$$ and $$Rs.2,50,000$$

$$Rs.7,50,000$$ and $$Rs.1,50,000$$

Solution

Question 9

$$Rs.32,500$$

$$Rs.57,522$$

$$Rs.44,312$$

None of these.

Solution

Question 10

Fixed assets minus fixed liabilities

Fixed assets minus current liabilities

Current assets minus fixed liabilities

Total assets minus total liabilities

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.