Financial Statements of a Company Test 7

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Financial Statements of a Company Test 7

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Weekly Quiz Competition

Question 1
1 / -0

The portion of the share capital which cannot be called up except on the winding up is known as _______________.

A
Called up capital

B
Paid-up capital

C
Authorized capital

D
Reserve capital

Solution

Reserve capital is that part of the share capital which is yet to be called by the company. It is that part of the authorised capital which can be called by the company, and is usually called upon on the winding up of the company. Reserve capital is not disclosed in the books of account.
Question 2
1 / -0

Which one of the following is the registered capital of the company?

A
Paid up capital

B
Uncalled capital

C
Authorized capital

D
Reserve capital

Solution

Authorised capital or registered capital or nominal capital of a company is the amount of share capital that the company is authorised to raise through public by issue of shares.. Basically the capital is registered in the memorandum of association of the company. The company cannot raise money beyond the Authorised capital or registered capital or nominal capital so registered.
Question 3
1 / -0

Under the new Company Act, 2013, paid up share capital of a 'Small Company ' does not exceed _______________.

A
Rs. 100 lakh

B
Rs. 50 Lakh

C
Rs. 5 Crore

D
Rs. 10 Crore

Solution

As per section 2(85) of the companies act 2013 a small company is any company, other than a public company
(i) whose share capital is not more than Rs 50 lakhs or such higher amount as may be prescribed which shall not exceed Rs 5 crore or,
(ii) Turnover or which as per its last profit and loss account does not exceed 2 crore rupees or such higher amount as may be prescribed which shall not be more than Rs 20 crore.
Question 4
1 / -0

"Proposed dividends' is shown in the balance sheet of a company under the head _____________.

A
Provisions

B
Current Liabilities

C
Reserves and Surplus

D
Other liabilities

Solution

A provision is an account which records the liability of the entity which is yet to be met. These are matched in the profit and loss account and the balance sheet. Proposed dividend is a provision created when the dividend is proposed by the directors and are yet to be paid to the shareholders. Hence they are shown in balance sheet under the head Provisions.
Question 5
1 / -0

According to the Companies Act, 2013, which of the following shall be treated as 'Current Investment'?

A
Investments in preference shares

B
Investments in partnership firms

C
Investment in Mutual Funds

D
All of the above

Solution

Current investments are the investments which are purchased with the motive of liquidating within a year. Hence, investment in preference shares, partnership firms and mutual funds are considered as Current investments because they can be liquidated in a year.
Question 6
1 / -0

According to the new provisions of the Companies Act 2013, 'Trade Receivables' shall be sub-classified in _________.

A
2 parts

B
4 parts

C
5 parts

D
6 parts

Solution

According to the Provisions of the companies Act 2013, Trade receivables shall be classified into 2 parts namely debtors and Bills receivables.

Debtors are the people to whom goods are sold on credit and payment is yet to be received from them. Bills receivables are bills of exchange accepted by the debtor or received in a way of endorsement from them.
Question 7
1 / -0

Bonus shares can be issued by a company _________________.

A
Out of reserves created by revaluation of fixed assets.

B
Out of share premium not collected in cash.

C
Without any provision for it in the articles of association of the company.

D
Out of free reserves built out of genuine profits.

Solution

Bonus shares are the shares which are issued by the company without any consideration. They are issued out of the free reserves available with the company. Bonus shares are issued to the existing shareholders on the basis of the number of shares they are currently holding.
Question 8
1 / -0

Consider the following statements :
1. According to the Companies Act 2013, 'goods-in-transit' shall not be disclosed under the sub-head of inventories.
2. The new Company Act 2013 says that 'goods-in-transit' shall also be shown as an inventory.
3. New Company Act 2013 describes that the mode of valuation of 'goods-in-transit' shall also be disclosed.
Which of the above statement/s is/are correct?

A
Only 3

B
Only 1

C
2 and 3

D
1 and 2

Solution

Goods in transit means the goods that have left the sellers place of business and have not reached the buyers place of business. As per the provisions of the companies act 2013 goods in transit should be recorded in the inventory if the legal title has been passed by the seller to the buyer and also their valuation should be disclosed by the company in the notes.
Question 9
1 / -0

According to the Companies Act, 2013, which of the following is correct name of 'CSRC'?

A
Corporate Special Reserve Commision

B
Corporate Social Responsibility Committee

C
Corporate Sinking Refund Council

D
Corporate Special Right Commission.

Solution

According to the Companies Act 2013, CSRC is known as Corporate Social Responsibility Committee. A Corporate Social Responsibility Committee is a committee created by the board of directors to promote good corporate social responsibility culture in the organisation.
Question 10
1 / -0

Under the New Companies Act 2013, 'Loans from Related Parties' is considered as _________________.

A
Reserves and surplus

B
Short-term brrowings

C
Long-term borrowings

D
Any of the above

Solution

Loan from related parties are generally the loans which are taken to be repaid over a period of time which is usually more than 12 months. Hence, they will be shown under the head Non current liabilities under the sub head long term borrowings.

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Financial Statements of a Company Test 7

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Financial Statements of a Company Test 7

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SHARING IS CARING

Question 1

Called up capital

Paid-up capital

Authorized capital

Reserve capital

Solution

Question 2

Paid up capital

Uncalled capital

Authorized capital

Reserve capital

Solution

Question 3

Rs. 100 lakh

Rs. 50 Lakh

Rs. 5 Crore

Rs. 10 Crore

Solution

Question 4

Provisions

Current Liabilities

Reserves and Surplus

Other liabilities

Solution

Question 5

Investments in preference shares

Investments in partnership firms

Investment in Mutual Funds

All of the above

Solution

Question 6

2 parts

4 parts

5 parts

6 parts

Solution

Question 7

Out of reserves created by revaluation of fixed assets.

Out of share premium not collected in cash.

Without any provision for it in the articles of association of the company.

Out of free reserves built out of genuine profits.

Solution

Question 8

Only 3

Only 1

2 and 3

1 and 2

Solution

Question 9

Corporate Special Reserve Commision

Corporate Social Responsibility Committee

Corporate Sinking Refund Council

Corporate Special Right Commission.

Solution

Question 10

Reserves and surplus

Short-term brrowings

Long-term borrowings

Any of the above

Solution

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