T.Y B.COM
SEMESTER - 6
COMPANY AUDIT
(CA)
MCQS = UNIT - II
1. He should take into account the followings in order to make a correct assessment of the loss.
a) The increased cost of working during the current year.
b) Turn over of the last year.
c) The period for which this loss is to be calculated.
d) all of the above
2. Company pays the stamp duty on the basis of .............
a) Subscribed capital
b) Paid up capital
c) Authorized capital
d) Issued capital
3. ............ of the Companies Act, 2013 defines "issued capital".
a) Section 2(7)
b) Section 2(50)
c) Section 2(6)
d) Section 2(5)
4.............. of the company Act, 2013, makes it obligatory for a company to disclose its issued capital in the balance sheet.
a) Schedule II
b) Schedule v
c) Schedule IV
d) Schedule III
5. The conditions of issue of shares contained in the .............
a) Memorandum and Articles of Association,
b) Prospectus or Statement in lieu of Prospectus
c) Shelf prospectus, red herring prospectus
d) All the above
6........... is a type of public offering where certain issuers are allowed to offer and sell securities to the public without a separate prospectus.
a) Red herring prospectus
b) Shelf prospectus
c) Both
d) None
7. A company proposing to make an offer of securities may issue a ........ prior to issue of a prospectus.
a) Shelf prospectus
b) Red herring prospectus
c) Statement in lieu of prospectus
d) Both
8. Auditor should vouch amounts refunded to the unsuccessful applicants with copies of .............
a) Letters of Regret
b) Letters of allotment
c) Bank statement
d) All of the above
9. What the auditor should examine to verify approval of allotments ?
a) Director's Minutes Book
b) General Meeting's Minutes book
c) Both
d) None
10. Check that the amount payable on the application on every security is not less than............... percent of the nominal amount of security.
a) Five
b) Four
c) Ten
d) None
11. If the minimum subscription is not received within a period of ............ thirty days from the date of issue of the prospectus check that the amount received above is returned within a period of ........... from the closure or the issue dad.
a) 30 days, 15 days
b) 15 days, 30 days
c) 30 days, 60 days
d) 60 days, 30 days
12. lf company failed to refund the money in case of failure of minimum subscription then company is liable to repay that amount with interest at the rate of ............. percent per annum.
a) 15
b) 6
c) 5
d) 10
13. Payment of commission and brokerage can be vouched first by reference to the .......... and the second by reference, to ...........
a) Stamps of brokers on application forms, underwriting contract
b) underwriting contract, Stamps of brokers on application forms
c) Companies Act, SEBI Rules
d) None
14. The company shall delivered share certificates within ......... three months after the allotment.
a) 30 days
b) three months
c) 60 days
d) two months
15.......... being the first shareholder of the Company, it is usual to make allotment in their favour.
a) The signatories to file Memorandum of Association
b) Directors
c) Both
d) None
16. allotment of shares in adjustment of a debt owed by the company is considered as issue of shares............
a) for a consideration other than cash
b) for cash
c) both
d) None
17. Any shares issued by a company at discounted price shall be ............
a) Can's say
b) Valid
c) Void
d) Legal
18. According to Section 53, a company shall not issue shares at a discount, except in the case of an issue of ........ given under section 54 of the companies Act, 2013.
a) sweet equity shares
b) right shares
c) bonus shares
d) all of the above
19. The securities premium account may be applied by the company -
a) in writing off the preliminary expenses etc.
b) towards fully paid bonus shares
c) in, providing for the premium payable on the redemption of preference shares
d) all of the above
20. Not less than ........... has, at the date of issue of sweat equity shares, elapsed since the date on which the company had commenced business.
a) six month
b) 2 years
c) 1 year
d) 90 days
21. The issue of sweat equity shares is authorized by a ..........
a) Board resolution
b) Ordinary resolution of company
c) Special resolution of company
d) All of the above
22. As per section 54 of the Companies Act, 2013, the employees may be compensated in the form of .........
a) Sweat Equity Shares
b) Bonus shares
c) Both
d) None
23. .............. means equity shares issued by the company to employees or directors at a discount or for consideration other than cash.
a) Sweat Equity Shares
b) Right shares
c) Bonus shares
d) All of the above
24. Companies can buy-back their own shares and other specified securities out of:
a) the securities premium account
b) its free reserves
c) the proceeds of the issue of any shares or other specified securities
d) all of the above
25. Section 68 (2) further states that no company shall purchase its own shares or other specified securities unless ..........
a) the buy-back is authorized by its articles
b) a special resolution of the company
c) none
d) both
26. In case the buy back is up to 10% of paid up equity + free reserves, the same may be done with the ............
a) Authorization of the General body Resolution
b) Authorization of the Board Resolution
d) None
c) Both
27. The buy-back is equal or less than ........... percent of the tolal paid-up capital and free reserves of the company.
a) 25
b) 10
c) 15
d) 20
28. The ratio of the debt owed by the company after such buy - back is not more than .......... the total of its paid up capital and its free reserves.
a) Twice
b) Four times
c) Thrice
d) None
29. This means that there cannot be more than ........... buy back in one year.
a) Two
b) Three
c) One
d) None
30. Every buy-back shall be completed within ............ from the date of passing the required resolution.
a) Twelve months
b) Three months
c) Six month
d) Can't say
31. The buy-back may be ..........
a) from the existing Security holders on a proportionate basis
b) from the open market
c) by purchasing the securities issued to employees of the company pursuant to a scheme of stock option or sweat equity
d) all of the above
32. Where a Company buys - back its own securities, it shall extinguish and physically destroy the securities so bought-back within .......... of the last date of the last date of completion of buy-back.
a) Seven days
b) Five days
c) Ten days
d) None
33. Interest on calls in advance can be paid out of ............
a) profits
b) capital
c) both
d) none
34. Preference shares should be redeemed within a period ............ from the date of their issue.
a) exceeding twenty years
b) not exceeding twenty years
c) not exceeding twenty five years
d) exceeding twenty five years
35. a company may issue preference shares for a period exceeding twenty years for .............
a) new projects
b) infrastructure projects
c) newly started company
d) none
36. Preference shares may be redeemed ............
a) at a fixed time or on the happening of a particular event
b) any time at the company's option, or
c) any time at the shareholder s option
d) all of the above
37. Preference shares shall be redeemed except out of the .........
a) profits of the company which would otherwise be available for dividend
b) proceeds of a fresh issue of shares made for the purpose of such redemption
c) both
d) none
38. A company may issue fully paid-up bonus shares to its members, in any manner whatsoever, out of
a) the securities premium account
b) its free reserves
c) the capital redemption reserve account
d) all of the above
39. The company should inform the ROC Within ........... about the alteration of share capital.
a) 45 days
b) 15 days
c) 60 days
d) 30 days
40. Fully paid-up bonus shares can be issued if ...........
a) it is authorized by its articles
b) it has, on the recommendation of the Board, been authorized in the general meeting of the company;
c) it has not defaulted in payment of interest or principal in respect of fixed deposits
d) all of the above
41. The auditor should ensure that the issue of convertible debentures are approved by a ..........
a) Special resolution passed at a general meeting
b) Ordinary resolution passed at a general meeting
c) Board resolution
d) All of the above
42. With respect to the issue of secured debentures an auditor has to ensure that .............
a) issue of debentures shall be secured by the creation of a charge
b) the company shall appoint a debenture trustee
c) the security for the debentures by way of a charge or mortgage shall be created in favour of the debenture trustee
a) all of the above
43. The payment of interest should be vouched with the ..........
a) endorsed warrants
b) acknowledgment of the debenture holders,
c) coupons surrendered
d) all of the above
44. Auditor should inspect the ......... to verity the amount of dividend declared.
a) BOD minutes book
b) shareholders minute book
c) both
d) none
45. Check the amount of dividend paid with the dividend warrants .........
a) issued
b) Surrendered
c) Returned undelivered
d) None
46. Unpaid or unclaimed dividend should be transferred within .......... days of the declaration of the dividend to a special bank account entitled "Unpaid Dividend Account of Company Limited/Company
(Pvt.) Limited".
a) 45
b) 30
c) 15
b) 60
47. The transfer of unpaid dividend must be made within ........ days from the date of expiry of thirty days.
a) 1 month
b) 30
c) 15
d) 7
48. In case any money transferred to the unpaid dividend amount of a Company remain unpaid or unclaimed for a period of ........... from the date of such transfer shall be transferred to ............
a) Seven years, Central Government account
b) Seven years, investor Education and protection
c) Five years , Central Government account d) Five years, investor Education and protection
49. The amount of dividend including interim dividend shall be deposited in a separate bank account within ............. from the date of declaration of such dividend.
a) three days
b) ten days
c) seven days
d) five days
50. ............ is the act of detail examination of activities so as to achieve certain objectives.
a) Investigation
b) Audit
c) Inquiry
d) All of the above
51. An .......... implies something in addition to the verification of the accuracy of the figures of the balance sheet.
a) Audit
b) Investigation
c) Inquiry
d) All of the above
52. The scope of ............. may either be extended or curtailed as per its objectives.
a) Investigation
b) Audit
c) Inquiry
d) All of the above
53. Inspection report should generally cover ............
a) A statement of work done, result obtained
b) A reference to the instructions received
c) A statement of conclusions reached
d) All of the above
---> Following deductions should be made to the figures of net profit to know the real maintainable profit.
54. Deductions from Profits:
a) Capital Profits i.e. Profit on sale of investments or other fixed assets.
b) Income from assets not taken over by purchaser.
c) Rent, in case the client is not going to purchase the premises.
d) all of the above
55. Following additions should be made to the figures of net profit to know the real maintainable profit.
a) Exceptional losses not resulting from business i.e. loss arising from under insurance speculations, litigations etc.
b) Capital Losses, Capital Expenditure if wrongly charged to revenue.
c) Interest on loan, when purchaser does not take them.
d) all of the above
56. Fraud is usually committed in the following ways:
a) Misappropriation of goods
b) Misappropriation of cash
c) Manipulation of accounts
d) all of the above
57. An investigator must examine projected financial statement and establish correctness of the following:
a) Cost Structure, Taxation Details
b) Gestation period, Capacity Utilization
c) Debt-Equity Ratio
d) all of the above
58. The investigator, while determining the fair value of shares, must consider the following points.
a) Earning capacity of the business
b) Safety of the capital
c) Current and expected levels of dividend
d) all of the above
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