8/11/2019 ac-3 paper

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1)We can say that the business is in profit, when:

A) Assets exceed Expenditure B) Income exceeds Liabilities

C) Income exceeds Expenditure D) Income exceeds Liabilities

2)According to the double entry system of accounting, an account that obtains benefit is:

A) Credit B) Debit C) Income D) No need to show as accounting record

3) Term "Credit" means_______ by the business.

A) Receiving of benefits B) It has no effect on business

C) Providing of benefits D) It depends upon items

4) When a Liability is reduced or decreased, it is recorded on the:

A) Left or credit side of the account B) Right or debit side of the account

C) Right or credit side of the account D) Left or debit side of the account

5) When Capital is increased by an amount, it is recorded on the:

A) Right or debit side of the account B) Left or credit side of the account

C) Left or debit side of the account D) Right or credit side of the account

6) What type of expenses are paid out of Gross Profit?

A) General Expenses B) Financial Expenses C) Selling Expenses D) All of the given options

7) Which of the following shows summary of a company's financial position at a specific date?

A) Profit & Loss Account B) Cash Flow Statement

C) Balance Sheet D) Income & Expenditure Account

8) Which of the following is NOT an example of intangible assets?

A) Franchise rights B) Goodwill C) Patents D) Land

9) Which of the following is an example of business liability?

A) Land B) Building C) Cash D) Creditors

10) The unfavorable balance of Profit and Loss account should be:

A) Added in liabilities B) Subtracted from current assets

C) Subtracted from capital D) Subtracted from liabilities

11) As per schedule VI of the Companies Act, 1956, Unclaimed dividend is to be shown as:

A) Current Liability B) contingent Liabilities C) Current Assets D) Provisions

12)the main difference between subscribed capital and called up capital is

A) Uncalled Capital b) calls in arrear C) Calls in Advance d) Autorised Capital

13) on forfeiture of Shares, share capital account will be debited by:

A) Called up amount b) Paid up Amount C) Calls in Arrears amount d) Face Value of shares

14) B. Ltd. Purchased assets worth Rs. 6,00,000 from vendor by issue of Rs. 100 shares each at a

premium of 20%. The number of shares to be issued by B. Ltd. Will be

A) 5000 b)4500 C) 5400 d) 5200

15) every Buy Back of shares shall be completed within

A) 10 Month B) 11 Month C) 12 Month D) 8 Month

16) a company can By-Back its shares:

A) Out of Revenue profit only B) Out of Capital Profit Only C) Out of proceed of Fresh issue of

shares only D) out of Free Reserves. Security Premium and proceed of liabilities

17) which of the following is not shown under schedule of share Capital?

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8/11/2019 ac-3 paper

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A) Calls in Arrears B)Preference Dividend C) Preference Share Capital D) Forfeited Shares

18) uncalled amount of partly paid share is required to be shown under

A) Current Liability B) Loan and Advances C) Share Capital D) Contingent Liability

19) A company cannot issue redeemablePreference Shares of a period exceeding;

A) 10 years B) 20 years C) 15 years D) 25 years

20) dividends are usually paid on:

A) Called Up capital B) Issued Capital c) Authorized Capital D) Paid Up Capital

Section : 2

Q: 1Raghav Co. Ltd. Issued for public subscription 1,40,000 Equity Shares of Rs. 10 each ata discount of

5% for which application for 2,30,000 shares were Received.

Shares were allotted as under;

1)

To refuse allotment to applicant for 60,000 shares

2)

To give full sllotment to applicants for Rs, 20,000 shares.

3)

To allot the remaining shares pro-rata among other applicant.

Money overpaid on applications was employed on account of sums due on allotment. The

company called up the amount per share as under:

On application Rs. 2, on allotment Rs. 2.50. On first call Rs. 3 and on Final Call Rs. 2.

Kruti whoi was allotted 4800 shares on pro-rata, did not pay the allotment and first call money.

The board of director forfeited the shares, after the first call was made and reissue them to

Nisha for Rs. 8.80 per share as fully paid.

Akruti who applied for 4000 shares and who was allotted shares on pro-rata basis did not pay

the first can final call. The board of director forfeited the shares after final call was made and

were re-issued at a discount of 10%

Pass necessary Journal Entry to record the above transactions in the books of the company.

Or