Classical

Financial and Management Accounting - Financial and Management Accounting Practice Questions

21:  

Capital bonus is given

A.
By making partly paid shares as fully paid without getting cash from the shareholders
B.
By the issue of free fully paid shares known as bonus shares
C.

By cash payment to shareholders

D.

Both (A) and (B)

 
 

Option: D

Explanation :


22:  
X and Yare partners sharing profits and losses in the proportion of 7 : 5. They agree to admit Z into partnership who is to get 1/6th share in profits. He acquires this share as 1/24 from X and 1/8th from Y. Calculate new profit sharing ratio.
A.

13:7:4

B.

7:5:3

C.

3:2:1

D.

5:4:2

 
 

Option: A

Explanation :


23:  
Which of the following statements is not correct?
A.

Realisation A/c is a real account

B.
A partnership firm is not dissolved on the death of a partner
C.
On dissolution of the partnership, the share of the outgoing partner is determined and the firm is not closed.
D.
Before Garner vs. Murray decision, no distinction was made between trading and capital loss.
 
 

Option: A

Explanation :


24:  
Change in the constitution of the firm may be due to
1.The admission of a new partner
2. The retirement of a partner
3. The death of a partner
Select the correct answer using the codes given below:
A.

1 and 2

B.

2 and 3

C.

1 and 3

D.

1,2 and 3

 
 

Option: D

Explanation :


25:  
Which of the following reserves are free reserves that can be used for issue of bonus shares?
l. Surplus in profit and loss account
2. General reserve
3. Capital reserve arising due to revaluation of assets.
4. Dividend equalisation reserve
5. Securities premium collected in cash only
6. Securities premium arising on issue of shares on amalgamation or take over.
Select the correct answer using the codes given below:
A.

1,2 4 and 5

B.

1,2,3,4 and 5

C.

1,2,4,5 and 6

D.

1,2,3,4,5 and 6

 
 

Option: A

Explanation :




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