Corporate Accounting MCQ

Given below are Corporate Accounting MCQ with answers. These multiple choice questions are useful for BBA, B Com, MBA, MMS, M Com, BA, MA, and PGDM students. These corporate accounting mcq questions can also be used for UGC NET, SET, Ph D, UPSC, and MPSC competitive entrance exams.

Corporate Accounting MCQ

91) X Ltd. goes into liquidation and an existing company Z Ltd. purchases the business of X Ltd. It is a case of:
A. Absorption
B. External reconstruction
C. Amalgamation.
D. Liquidation
Option: A

92) Liabilities (not accumulated profits) of a company include—
A. General reserve
B. Pension fund
C. Dividend equalisation fund.
D. Retain earning
Option: B

93) When the expenses of liquidation are to be borne by the vendor company, then the vendor company debits:
A. Realisation account
B. Bank account
C. Goodwill account.
D. Purchasing company account
Option: A

94) Accumulated profits include:
A. Provision for doubtful debts
B. Superannuation fund
C. Workmen’s compensation fund.
D. Provision for Tax
Option: C

95) For paying liabilities not taken over by the purchasing company, the vendor company credits:
A. Realisation account
B. Bank account
C. Liabilities account.
D. purchasing company account
Option: B

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96) Which one is more appropriate for cost of retained earning?
A. Weighted Average cost of capital
B. Opportunity cost to the firm
C. Expected rate of return by the investor
D. None of the above
Option: B

97) Debt financing is a cheaper source of finance because of
A. Time value of Money
B. Rate of Interest
C. Tax deductibility of Interest
D. Dividends not payable to lenders.
Option: C

98) The vendor company transfers preliminary expenses (at the time of absorption) to:
A. Purchasing Company account
B. Realisation account
C. Purchasing company’s account.
D. Equity shareholders’ account
Option: D

99) A newly established company cannot be successful in obtaining finance by way of
A. issue of equity capital
B. issue of preference share
C. issue of debenture
D. None of the above
Option: C

100) Money spent to acquire or upgrade physical assets is known as:
A. Revenue Expense
B. Capital Expense
C. Administrative Expense
D. Operating Expense
Option: B

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