Financial Accounting 2 MCQs [set-8]

176. If the hire purchaser fails to make payment of any installment, it is called
_______
A. default
B. repossession
C. sale
D. purchase
Answer: A

177. If the hire vendor may take away all the goods on which there is default of
installment it is called____________
A. repossession
o m
B. partial repossession
. c
C. complete repossession te
a
D. purchase.
Answer: C
q M
c
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178. The hire vendor takes away only a portion of the goods on which there is
default of Installments it is called _________
A. repossession
B. partial repossession
C. complete repossession
D. purchase
Answer: B

179. In the books of hirer, for payment of installment hire vendor account will be
________
A. debited
B. credited
C. rectified
D. reversed
Answer: A
180. In the books of hirer, for interest due at the end of the year hire vendor
account will be _______
A. debited
B. credited
C. rectified
D. reversed
Answer: B

181. In the books of Hirer, the interest and depreciation account will be
transferred to ______.
A. trading account
B. p & l account
C. p & l appropriation account
D. balance sheet
Answer: B

182. Nature of hire purchase agreement is __________.

A. agreement of sale
B. option to transfer
C. option to buy
D. option to sell
Answer: C

183. In case of Hire-Purchase the total sum payable by the hire-purchaser as per
terms in order to complete the transactions is
A. net cash price
B. net hire-purchase charges
C. hire-purchase price
D. cash price instalment
Answer: C

184. Under ______ system the buyer does not get ownership of goods immediately
A. installment
B. hp
C. installment and hp
D. none of these
Answer: B

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185. ________ means the price at which the goods can be purchased by the hirer
for ready cash.
A. hp price
B. installment price
C. cash price
D. down payment
Answer: C

186. ________ is the initial payment made at the time of signing the hire purchase
agreement
A. hp price
B. installment price
C. cash price
D. down payment
Answer: D

187. The difference between hire purchase price and the cash price is called ______
A. hire charges
B. cost of the asset
C. installment price
D. cash price
Answer: A

188. In order to deal with the re possession the hire vendor operates an account
called _______
A. asset account
B. goods account
C. goods repossessed account
D. none of these
Answer: C

189. Hire Purchase price =

A. cash price + down payment
B. cash price + total interest
C. cash price
D. sum of total instalments
Answer: B

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190. Cash Price =
A. hire purchase price – total interest
B. down payment in cash
C. down payment + interest
D. none of the above
Answer: A

191. Which of the following statement is false:

A. a company is a legal entity quite distinct from its members
B. a company can buy its own share
C. a shareholder is the agent of the company
D. same person can agent and creditor of the company
Answer: C

192. Which of the following are the characteristics of a company

A. liability of the members is limited up to the face value of shares held by them
B. it is a voluntary association of persons
C. a company is a separate body can sue and be sued in its own name
D. perpetual succession
Answer: C

193. Share application and allotment account is a:

A. personal account
B. real account
C. nominal account
D. none of the above
Answer: A

194. Securities premium account is shown on the liabilities side of the balance sheet
under the head:
A. share capital
B. reserves and surplus
C. current liabilities
D. non-current liabilities
Answer: B

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195. As per section 78 of the companies act, amount collected as premium on
securities cannot be utilized for:
A. issuing fully paid bonus shares to the members
B. purchase of fixed assets
C. writing off preliminary expenses
D. buy back of it’s own shares
Answer: B

196. The portion of the authorised capital which can be called-up only on the
liquidation of the company is called
A. authorised capital
B. reserve capital
C. issued capital
D. called up capital
Answer: B

197. Which of the following statement is false:

A. buy back must be authorised by articles of company
B. a special resolution must be passed for buy back
C. shares can be partly paid up
D. the ratio of debt owed by the company is not more than twice the capital and its
Answer: C

198. If shares are bought back out of free reserves then a sum equal to nominal
value of the shares so bought back is transferred to:
A. capital reserve account
B. capital redemption reserve account (crr)
C. general reserve account
D. statutory reserve account
Answer: B

199. Maximum buy back limit in any year is ______ of total paid up equity capital
and free reserves.
A. 25%
B. 10%
C. 20%
D. no limit

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Answer: A

200. Which of the following statement in false:

A. bonus issue is made out of free reserves or securities premium collected in cash only
B. bonus shares can be issued out revaluation profit
C. no bonus issue shall be made within 12 months of any public or right issue
D. company can issue bonus shares in any ratio.
Answer: B

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