1) A preference share is one (i) which carries preferential right with respect to payment of dividend at fixed rate (ii) which carries preferential right with respect to repayment of capital on winding up a) Both (i) and (ii) are incorrect b) Only (i) is correct c) Only (ii) is correct d) Both (i) and (ii) are correct 2) That part of share capital which can be called up only on the winding up of a company is called: a) Reserve capital b) Authorised capital c) Called up capital d) Capital reserve 3) At the time of forfeiture, share capital account is debited with a) Called up amount b) Face value c) Nominal value d) Paid up amount 4) After the forfeited shares are reissued, the balance in the forfeited shares account should be transferred to a) Surplus account b) General reserve account c) Capital reserve account d) Securities premium account 5) The amount received over and above the par value is credited to a) Forfeited shares account b) Securities premium account c) Calls in advance account d) Share capital account 6) Which of the following statement is false? a) Paid up capital is part of called up capital b) Issued capital can never be more than the authorised capital c) In case of under subscription, issued capital will be less than the subscribed capital d) Reserve capital can be called at the time of winding up 7) When shares are issued for purchase of assets, the amount should be credited to a) Bank A/c b) Vendor’s A/c c) Sundry assets A/c d) Share capital A/c 8) If a share of ` 10 on which ` 8 has been paid up is forfeited. Minimum reissue price is a) ` 2 per share b) ` 10 per share c) ` 8 per share d) ` 5 per share 9) Supreme Ltd. forfeited 100 shares of ` 10 each for non-payment of final call of ` 2 per share. All these shares were re-issued at ` 9 per share. What amount will be transferred to capital reserve account? a) ` 1,000 b) ` 700 c) ` 800 d) ` 900 10) Match the pair and identify the correct option (1) Under subscription - (i) Amount prepaid for calls (2) Over subscription - (ii) Subscription above the offered shares (3) Calls in arrear - (iii) Subscription below the offered shares (4) Calls in advance - (iv) Amount unpaid on calls a) (i) (ii) (iii) (iv) b) (iv) (iii) (ii) (i) c) (iii) (ii) (iv) (i) d) (iii) (iv) (i) (ii) 11) Which of the following statements is not true? a) The common–size statements show the relationship of various items with some common base, expressed as percentage of the common base b) Notes and schedules also form part of financial statements. c) The tools of financial statement analysis include common-size statement d) Trend analysis refers to the study of movement of figures for one year 12) Balance sheet provides information about the financial position of a business concern a) For the accounting period b) Over a period of time c) As on a particular date d) For a period of time 13) Which of the following tools of financial statement analysis is suitable when data relating to several years are to be analysed? a) Trend analysis b) Cash flow statement c) Common size statement d) Comparative statement 14) The financial statements do not exhibit a) Long term data b) Non-monetary data c) Past data d) Short term data 15) Which of the following is not a tool of financial statement analysis? a) Standard costing b) Trend analysis c) Common size statement d) Comparative statement 16) The term ‘fund’ refers to a) Non-current assets b) Current liabilities c) Working capital d) Fixed assets 17) Which of the following statements is not true? a) Interpretation of the analysed data involves personal judgement. b) All the limitations of financial statements are applicable to financial statement analysis also. c) Financial statement analysis is only the means and not an end. d) Expert knowledge is not required in analysing the financial statements. 18) A limited company’s sales has increased from ` 1,25,000 to ` 1,50,000. How does this appear in comparative income statement? a) – 20 % b) + 20 % c) + 120 % d) – 120 % 19) In a common-size balance sheet, if the percentage of non-current assets is 75, what would be the percentage of current assets? a) 100 b) 175 c) 125 d) 25 20) Expenses for a business for the first year were ` 80,000. In the second year, it was increased to ` 88,000. What is the trend percentage in the second year? a) 11% b) 10 % c) 110 % d) 90 % 21) The mathematical expression that provides a measure of the relationship between two figures is called a) Decision b) Conclusion c) Ratio d) Model 22) Current ratio indicates a) Long term solvency b) Ability to meet short term obligations c) Efficiency of management d) Profitability 23) Current assets excluding inventory and prepaid expenses is called a) Quick assets b) Reserves c) Tangible assets d) Funds 24) Debt equity ratio is a measure of a) Efficiency b) Short term solvency c) Long term solvency d) Profitability 25) Match List I with List II and select the correct answer using the codes given below: List I List II (i) Current ratio 1. Liquidity (ii) Net profit ratio 2. Efficiency (iii) Debt-equity ratio 3. Long term solvency (iv) Inventory turnover ratio 4. Profitability a) 1 2 3 4 b) 1 4 3 2 c) 3 2 4 1 d) 4 3 2 1 26) To test the liquidity of a concern, which of the following ratios are useful? (i) Quick ratio (ii) Net profit ratio (iii) Debt-equity ratio (iv) Current ratio Select the correct answer using the codes given below: a) (ii) and (iv) b) (i) and (ii) c) (i) and (iv) d) (ii) and (iii) 27) Proportion of share holders' funds to total assets is called a) Current ratio b) Proprietary ratio c) Capital gearing ratio d) Debt equity ratio 28) Which one of the following is not correctly matched? a) Debt-equity ratio – Proportion b) Liquid ratio – Proportion c) Gross profit ratio – Percentage d) Fixed assets turnover ratio – Percentage 29) Current liabilities ` 40,000; Current assets ` 1,00,000 ; Inventory ` 20,000 . Quick ratio is a) 1:2 b) 1:1 c) 2.5:1 d) 2:1 30) Cost of revenue from operations ` 3,00,000; Inventory in the beginning of the year ` 60,000; Inventory at the close of the year ` 40,000. Inventory turnover ratio is a) 8 times b) 2 times c) 3 times d) 6 times

+2 Accontancy losson7-9 Prepared by M.MuthuSelvam Cell No: 9842104826

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