Page 48 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

AIFS.22 N21M
Sec. 52 of the Companies Act states that Security Premium Account can be applied by the Company
for one of the purpose mentioned below. Which of the following is a CORRECT option?

a) To adjust loss on revaluation of Assets
b) To pay dividend to equity shareholders
c) Providing for the premium payable on redemption of Preference shares
d) To use it as working capital for its business.

AIFS.23 M21M
Which of the following is an example of revenue expenditure-
a) Wages on installation of Machinery
b) Regular repairs incurred on PPE
c) Legal expenses in purchase of land and building
d) Freight inwards on purchase of PPE

AIFS.24 M22M
Obtaining trade receivables ageing report and analysis and identification of doubtful debts is
performed during audit of accounts receivable balances to address the following balance sheet
assertion:
a) Valuation
b) Rights and obligations
c) Existence
d) Completeness

AIFS.25 N23R
ABC Limited is engaged in manufacturing of electric two-wheelers. During the year, a customer has
gone to court due to incident of fire in battery-operated vehicle. The damages claimed are to tune
of ₹ 5 lakhs. The company insists that this incident was due to improper charging of battery and has
nothing to do with manufacturing design of vehicle. The company’s lawyers advise that it is
probable that company is not likely to be held liable. It is likely to be reflected in financial
statements of company under_____?

a) Provisions
b) Reserves
c) Contingent liabilities
d) Other current Liabilities

AIFS.26 N23M
The securities premium account may be applied by the Company for which of the following purpose:
a) payment to creditors for material
b) purchase of fixed assets
c) repayment of loans
d) writing off the preliminary expenses

AIFS.27 SM23
Sweat Equity shares are issued by a company at a discount or for consideration other than cash to
its:-

a) Directors only
b) Clients only
c) Directors or employees
d) Auditors only

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