Practice Test

Q1) In Internal Reconstruction Show Answer

Q2) A limited company may after the share capital is issued Show Answer

Q3) Reduction of share capital of a company means reduction in Show Answer

Q4) Balance in Capital reduction A/c is generally transferred to Show Answer

Q5) The existing 1,000 shares of Rs.1 each are altered to 100 shares of Rs.10 each. This is known as Show Answer

Q6) The existing 1,000 shares of Rs.100 each are altered to 10,000 shares of Rs.10 each. This is known as Show Answer

Q7) While granting approval to any scheme of Capital Reduction, the court may direct the company to add the following words to its name for such period as it thinks fit. Show Answer

Q8) Reconstruction refers to an arrangement, whereby Show Answer

Q9) The credit balance in capital reduction a/c is utilized for Show Answer

Q10) For capital reduction under internal reconstruction, authorization / approval is required from Show Answer

Q11) Splitting shares of a higher denomination into shares of smaller denomination is known as____. Show Answer

Q12) Past losses and fictitious assets are wiped out by making use of the credit balance in_____ a/c under internal reconstruction. Show Answer

Q13) Surrendered shares ____ be re-issued. Show Answer

Q14) Capital Reduction A/c is _____ to record all sacrifices by the lenders / shareholders. Show Answer

Q15) Increase in value of Land will be recorded on ____ side of Capital Reduction A/c. Show Answer

Q16) A company cannot subdivide shares of larger denomination into shares of smaller denomination. Show Answer

Q17) A company is free to reduce or extinguish the uncalled liability of its members. Show Answer

Q18) No permission from the Court is required for a company to write off or cancel any paid up capital which is lost or not represented by available assets. Show Answer

Q19) Cancellation of unissued capital is also a case of capital reduction. Show Answer

Q20) Only sick companies undertake capital reduction. Show Answer

Q21) Permission of the court is required for a company to return capital which is in excess of the requirements of the company. Show Answer

Q22) No journal entry is required for the cancellation of un-issued share capital. Show Answer

Q23) After granting the scheme of capital reduction the court may order the use of words 'And Reduced' after the name of the company till its winding up. Show Answer

Q24) Consent of the creditors is required if capital reduction involves diminution of liability regarding uncalled capital or return of Paid-up capital. Show Answer

Q25) Consent of the creditors is not required if capital reduction involves the writing off of paid-up capital lost or not represented by available assets. Show Answer

Q26) Any surplus in the capital reduction account after writing off lost capital is transferred to General reserve. Show Answer

Q27) In a scheme of reconstruction amount of shares surrendered by shareholders is transferred to Capital reduction account. Show Answer

Q28) Amounts sacrificed by shareholders in a scheme of internal reconstruction are credited to Capital reserve account. Show Answer

Q29) For a company to carry out capital reduction, permission is required from Central Government. Show Answer

Q30) Security premium account can be transferred to Capital Reduction Account. Show Answer

Q31) External Reconstruction involves reduction in capital. Show Answer

Q32) The payments for contingent liability should be debited to______. Show Answer

Q33) Need of internal reconstruction ________. Show Answer

Q34) In internal reconstruction methods of calculation of purchase consideration is by_______. Show Answer

Q35) On internal reconstruction assets are written off except _______. Show Answer

Q36) Reconstruction refers to an arrangement whereby _______. Show Answer

Q37) The cancellation of contingent liability is ____ of company. Show Answer

Q38) Section 66 of companies Act deals with______. Show Answer

Q39) Re-arrangement of rights or liabilities without any dispute is _______. Show Answer

Q40) Capital Reduction requires______. Show Answer

Q41) Capital Reduction is implemented per Section _______ of Companies Act. Show Answer

Q42) Entry of dividend not declared but paid now Show Answer

Q43) Surrender of fully paid shares amounts to ______. Show Answer

Q44) And Reduced' words are to be shown as in balance sheet as per _______ requirement. Show Answer

Q45) While granting approval to any scheme of capital reduction the court may direct the company to add the following words to its name for such period as it thinks fit. Show Answer

Q46) Credit balance on capital reduction a/c is utilised for______ . Show Answer

Q47) A limited company may alter the share capital so as to ______. Show Answer

Q48) Internal reconstruction requires_____. Show Answer

Q49) Entry of expenses of reconstruction___. Show Answer

Q50) Debenturholders accepting less than the face value of their debentures amounts to______. Show Answer

Q51) While preparing balance sheet after reconstructed following points are to be kept in mind. Show Answer

Q52) Amicable settlements of differences by mutual consent by parties is_____. Show Answer

Q53) The scheme of internal reconstruction requires sanction from_____. Show Answer

Q54) Creditors foregoing their claims in whole or in part is ___________. Show Answer

Q55) Fictitious assets are to be transferred to______. Show Answer

Q56) Reduction in share capital of a company means reduction in______. Show Answer