ICSE XII MCQ Quiz Hub

Browse questions and answers for the MCQ Questions for Class 12 Accountancy set-7 quiz.

Dividends are usually paid on :

1. Authorised Capital

2. Issued Capital

3. Called-up Capital

4. Paid-up Capital

✅ Correct Answer: 4

If vendors are issued fully paid shares of â‚¹ 1,00,000 in consideration of net assets of â‚¹ 1,20,000 the balance of â‚¹ 20,000 will be credited to :

1. Goodwill Account

2. Capital Reserve Account

3. Vendorâ€™s Account

4. Profit & Loss Account

✅ Correct Answer: 2

Which account should be debited when shows an issued to promoters:

1. Share Capital A/c

2. Assets A/c

3. Promoterâ€™s A/c

4. Goodwill A/c

✅ Correct Answer: 4

According to Section 52 of the Compaines Act, the amount in the Securities Premium Account cannot be used for the purpose of:

1. Issue of fully Paid Bonus Shares

2. Writing Off Losses of the Company

3. Writing off Preliminary Expenses

4. Writing Off Commission or Discount on Issue of Shares

✅ Correct Answer: 2

10,000 equity shares of 10 Rs. each were issued to public at a premium of â‚¹ 2 per share payable on allotment. Applications were received for â‚¹ 12,000 shares. Amount of securities premium account will be :

1. â‚¹ 20,000

2. â‚¹ 24,000

3. â‚¹ 4,000

4. â‚¹ 1,600

✅ Correct Answer: 1

A Ltd. purchased a machinery for 1,80,000 Rs. for which it is paying by issue of shares of 100 Rs. each at 20% premium. How many shares will be issued as consideration. ?

1. 2,500

2. 2,000

3. 1,500

4. 3,000

✅ Correct Answer: 3

Right Shares are issued to :

1. Promoters for the Services

2. Holders of Convertible Debentures

3. Existing Shareholders

4. All of the above

✅ Correct Answer: 3

A company is registered with a share capital of â‚¹ 1,00,000 Rs. divided into â‚¹ 10,000 shares of â‚¹ 10 each. Of these shares 9,990 shares are held by Rajeev and 10 Shares are held by Sanjay. In the eye of law it is treated as:

1. Partnership

2. Private Company

3. Public Compancy

4. Government Company

✅ Correct Answer: 2

Which of the following should be deducted from the called-up capital to find out paid-up capital:

1. Calls-in-advance

2. Calls-in-arrear

3. Share forfeiture

4. Discount on issue of shares

✅ Correct Answer: 2

When all debentures are redeemed, balance in the Debenture Redemption Fund Account is transferred to:

1. Capital Reserve

2. General Reserve

3. Profit & Loss Appropriation A/c

4. None of these

✅ Correct Answer: 1

According to SEBI guidelines, a Company will have to create debenture redemption reserve equivalent to the amount of the following percentage of debenture issued:

1. 50%

2. 25%

3. 70%

4. 100%

✅ Correct Answer: 2

The balance of â€˜Sinking Fund Accountâ€™ after the redemption of debentures is transferred to :

1. Profit & Loss Account

2. Profit & Loss Appropriation Account

3. General Reserve Account

4. Sinking Fund Account

✅ Correct Answer: 3

Profit on cancellation of own debentures is transferred to:

1. Profit & Loss Account

2. Profit & Loss Appropriation Account

3. General Reserve Account

4. Capital Reserve Account

✅ Correct Answer: 4

If debenture of â‚¹ 1,00,000 were issued for discount of â‚¹ 10,000, which are redeemable after four years. Then amount of discount to be written off from P. & L. Account each year is :

1. â‚¹ 3,000

2. â‚¹ 4,000

3. â‚¹ 2,500

4. â‚¹ 5,000

✅ Correct Answer: 3

Debentures can be redeemed out of:

1. Profit

2. Capital

3. Provision

4. All of the above

✅ Correct Answer: 4

Premium on redemption of debentures is a :

1. Personal A/c

2. Real A/c

3. Nominal A/c

4. Suspense A/c

✅ Correct Answer: 3

Premium on redemption of debentures is generally provided at the time of â€¦â€¦â€¦â€¦â€¦

1. Issue of debentures

2. Redemption of debentures

3. Writing off

4. After 10 years

✅ Correct Answer: 2

Debentures cannot be redeemed at:

1. Par

2. Premium

3. Discount

4. More than 10% premium

✅ Correct Answer: 3

If debentures purchased in open market are not immediately cancelled, they are treated as :

1. Current Assets

2. Current Liabilities

3. Investment

4. Capital

✅ Correct Answer: 3

Sources of finance of the redemption of debentures are:

1. Redemption out of profits

2. Redemption out of capital

3. The proceeds from fresh issue of shares/debentures

4. All the above

✅ Correct Answer: 4

A company issued 1,000, 12% debentures of â‚¹ 100 each at 10% premium. 12% stand for:

1. Rate of dividend

2. Rate of Tax

3. Rate of interest

4. None of these

✅ Correct Answer: 3

A company should transfer to Debenture Redemption Reserve A/c at least what percent of the amount of debentures issued before the commencement of redemption of debentures-

1. 50%

2. 25%

3. 15%

4. 100%

✅ Correct Answer: 2

If redemption of debentures is made by conversion method, the amount to be transferred to â€˜Debenture Redemption Reserve Accountâ€™ will be equal toâ€¦â€¦.percent of converted amounted.

1. 40

2. 50

3. 60

4. Not required

✅ Correct Answer: 4

Loss on Issue of Debenture Account is shown:

1. On Assets side of Balance Sheet

2. On Liabilities side of Balance Sheet

3. On Credit side of P & L Account

4. None of these

✅ Correct Answer: 1

Profit on sale of Sinking Fund Investment is transferred to:

1. Profit & Loss Account

2. General Reserve

3. Sinking Fund Account

4. Capital Reserve

✅ Correct Answer: 3

Premium on Redemption of Debentures A/c is:

1. Asset

2. Expenses

3. Liability

4. Revenue

✅ Correct Answer: 3

Interest on sinking fund investment is credited to :

1. Profit & Loss A/c

2. Sinking Fund A/c

3. General Reserve A/c

4. Sinking Fund Investment A/c

✅ Correct Answer: 2

Sinking fund investment is:

1. An Income

2. An exause

3. An Asset

4. A Liability

✅ Correct Answer: 3

When debentures are issued at par and are redeemable at a premium, the loss on such an issue is debited to :

1. Profit & Loss A/c

2. Debenture Application and Allotment A/c

3. Loss on Issue of Debentures A/c

4. Premium on Redemption A/c

✅ Correct Answer: 3

Own debentures are those debentures of the company which ?

1. The company allots to its own promotors

2. The company allots to its directors

3. The company purchases from the markets and hold them as investments

4. None of these

✅ Correct Answer: 3

When debentures are redeemed out of profits, an equivalent amount is transferred to :

1. General Reserve

2. Debenture Redemption Reserve

3. Capital Reserve

4. Profit & Loss A/c

✅ Correct Answer: 2

Profit on sale of debentures redemption fund investment in the first instance in credited to :

1. Debenture Redemption Fund A/c

2. Profit & Loss Appropriation A/c

3. General Reserve A/c

4. Sinking Fund A/c

✅ Correct Answer: 1

When debentures are issued at a discount and are redeemable at a premium, which of the following accounts is debited at the time of issue ?

1. Debentures A/c

2. Premium on Redemption of Debentures A/c

3. Loss on Issue of Debentures A/c

4. Profit & Loss A/c

✅ Correct Answer: 3

According to SEBI guidelines what percentage of the amount of debentures must be transferred to Debenture Redemption Reserve, before the commencement of redumption of debentures, in case of convertible debentures ?

1. 25%

2. 50%

3. 100%

4. zero

✅ Correct Answer: 4

Profit on redemption of debentures in transferred to which account ?

1. Capital Reserve Account

2. Sinking Gund Account

3. General Reserve Account

4. Profit & Loss Account

✅ Correct Answer: 1

Profit on cancellation of own debentures is :

1. Revenue Profit

2. Capital Profit

3. Operating Profit

4. Trading Profit

✅ Correct Answer: 2

6,000 debentures of â‚¹ 10 each where discharged by issuing equity shares of â‚¹ 10 each at 20% premium. The number of shares issued will be :

1. 50,000

2. 60,000

3. 5,000

4. 6,000

✅ Correct Answer: 3

Every company required to create DRR shall on or before the 30th April of each year, deposit or invest, a sum which shall not be less thanâ€¦â€¦â€¦â€¦of the amount of its debentures maturing (to be redeemed) during the year ending on 31st March of the next year.)

1. 10%

2. 15%

3. 25%

4. 50%

✅ Correct Answer: 2

A Sinking Fund is a part of:

1. Fixed Liabilities

2. Current Liabilities

3. Reserves and Surplus

4. Fixed Assets

✅ Correct Answer: 3

A company issued 1000, 12% debentures of â‚¹ 100 each at 10% premium. 12% stand for :

1. Rate of Dividend

2. Rate of Tax

3. Rate of Interest

4. None of these

✅ Correct Answer: 3

BST Ltd. want to redeem its 900, 10% debentures at 105% by converting them into shares of â‚¹ 10 each at â‚¹ 9 each. The number of shares to be issued will be :

1. 9,000 Shares

2. 10,500 Shares

3. 10,000 Shares

4. 8,500 Shares

✅ Correct Answer: 2

Premium on Redemption of Debentures A/c is in the nature of:

1. Personal A/c

2. Real A/c

3. Nominal A/c

4. None of these

✅ Correct Answer: 3

Deep Ltd. issue 10,00,000, 7 % debentures of 100 Rs. each at a discount of 4%, redeemable after 5 years at a premium of 6%. Loss issue of debentures is :

1. â‚¹ 10,00,000

2. â‚¹ 6,00,000

3. â‚¹ 16,00,000

4. â‚¹ 4,00,000

✅ Correct Answer: 1

Debenture is a :

1. Loan certificate

2. Cash certificate

3. Credit certificate

4. None of these

✅ Correct Answer: 1

Debenture holders are the :

1. Customers of the Company

2. Owners of the Company

3. Creditors of the Company

4. None of these

✅ Correct Answer: 3

In case of issue of debentures as a collateral security for loan from the bank which account will be debited :

1. Bank Account

2. Bank Loan Account

3. Debentures Account

4. Debentures Suspense Account

✅ Correct Answer: 4

If debentures of â‚¹ 4,50,000 are issued for the consideration of net assets of â‚¹ 5,00,000 balance â‚¹ 50,000 will be credited to:

1. Profit & Loss A/c

2. Goodwill A/c

3. General Reserve A/c

4. Capital Reserve A/c

✅ Correct Answer: 4

Debentures which are transferred by mere delivery are called:

1. Registered Debentures

2. First Debentures

3. Bearer Debentures

4. None of these

✅ Correct Answer: 3

In the Balance Sheet of a Company, Debentures are shown under the head :

1. Unsecured Loans

2. Long-term Loans

3. Current Liabilities

4. Reserve and Surplus

✅ Correct Answer: 2

Discount on issue of Debentures is in the nature of:

1. Revenue Loss

2. Capital Loss

3. Deferred Revenue Expenditure

4. None of there

✅ Correct Answer: 2