Practice Test

Q1) Interest is always calculated on the Market Value of the security. Show Answer

Q2) Interest is paid to the holder of the security on the due date, in respect of his actual period of holding. Show Answer

Q3) If a security is transferred on the exact date when interest falls due, the entire interest upto that due date belongs to the purchaser. Show Answer

Q4) If a security is transferred on any date other than the due date for payment of interest, the purchaser has the right to claim the Interest upto the date of transfer as his income. Show Answer

Q5) If a security is transferred on any date other than the due date for payment of interest, the seller has the right to claim the Interest after the date of transfer as his income. Show Answer

Q6) Ex-Interest price Less Accrued interest = Cost of the investment. Show Answer

Q7) Total Payment by purchaser = Ex-Interest Price – Accrued Interest. Show Answer

Q8) Dividend is always calculated on the Face value or Nominal Value of the shares. Show Answer

Q9) Dividend on shares accrues on the date of the book-closure by the company. Show Answer

Q10) Dividend on shares is paid to the holder of the shares on the date of declaration, irrespective of his actual period of holding. Show Answer

Q11) When bonus shares are received only the Nominal Value of such bonus shares is entered in the Investment A/c. Show Answer

Q12) When the rights are sold (without subscribing) no entry is made in the Investment Account. Show Answer

Q13) When the rights are sold (without subscribing), sale proceeds are credited to the Profit & Loss Account. Show Answer

Q14) Whether the price is cum-interest or ex-interest, accrued interest is always calculated and entered in the Income column in the Investment Account. Show Answer

Q15) Profit on sale of current investment is transferred to profit & loss A/c; while profit on sale of long term investment is transferred to Capital Reserve. Show Answer

Q16) Investment held as long term investment is always valued at cost at the year end as per AS 13. Show Answer

Q17) Nominal Value Column in the Investment Account is only a memorandum column. Show Answer

Q18) Following is not a Fixed Income Bearing Security Show Answer

Q19) Interest is always calculated on the Show Answer

Q20) Interest on bonds accrues Show Answer

Q21) Interest is paid Show Answer

Q22) If a security is transferred on 31st March, 2013 being the exact date when interest falls due Show Answer

Q23) A security is transferred on 31st May, 2013; while the next interest falls due on 30th June, 2013 Show Answer

Q24) XYZ buys 200 Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 98 (ex-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December. Show Answer

Q25) XYZ buys 200 Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 98 (cum-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December. Show Answer

Q26) XYZ buys 200 Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 98 (ex-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December. Show Answer

Q27) XYZ buys 200 Debentures of nominal value of RS. 100 each of ICICI Ltd. at Rs. 98 (ex-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Price paid by XYZ towards capital is
Show Answer

Q28) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs. 98 (ex-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Total payment made by XYZ is
Show Answer

Q29) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs. 101 (cum-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Price paid by XYZ towards capital is
Show Answer

Q30) XYZ buys 200 Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 101 (cum-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Total payment made by XYZ is
Show Answer

Q31) ABC sells 100 Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 98 (ex-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Nominal Value of investments sold is
Show Answer

Q32) ABC sells 100 Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 98 (ex-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Amount received towards capital is
Show Answer

Q33) ABC sells 100 Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 101 (cum-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Amount received towards capital is
Show Answer

Q34) ABC sells 100 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs. 98 (ex-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Total amount received is
Show Answer

Q35) ABC sells 100 Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 101 (cum-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Total amount received is
Show Answer

Q36) XYZ buys Debentures of nominal value of Rs. 100 each of ICICI Ltd. at Rs. 98 (ex-interest) on 1-3-2012 from ABC. Interest of Rs. 400 has accrued from the last due date till the date of purchase.
In the entry for recording this investment in the books of XYZ
Show Answer

Q37) On each sale of investment, the profit or loss is calculated as Show Answer

Q38) Profit on sale of investment Show Answer

Q39) If market value of investment held as current asset is less than cost Show Answer

Q40) If market value of investment held as long term asset is less than cost Show Answer

Q41) Dividend on shares accrues Show Answer

Q42) Dividend is paid Show Answer

Q43) XYZ Ltd. pays a dividend on 30-09-2012 for the year ended on 31-03-2012, Show Answer

Q44) The current investments are valued on closing date at Show Answer

Q45) Any reduction to market value of current investment from cost, on valuation date is debited to Show Answer

Q46) Current investments should be valued at the lower of cost and market value determined on Show Answer

Q47) Interest on securities is paid Show Answer

Q48) When dividend is actually received on the due date, Show Answer

Q49) When bonus shares are received - Show Answer

Q50) When the rights shares are subscribed - Show Answer

Q51) When the rights are sold (without subscribing) Show Answer

Q52) The cost of Right shares is Show Answer

Q53) Long term investments are carried at Show Answer

Q54) Short term investments are carried at Show Answer

Q55) A Ltd. acquired 2,000 equity shares of Omega Ltd., on cum-right basis at Rs.75 per share. Subsequently, omega Ltd. made a right issue of 1 : 1 at Rs. 60 per share, which was subscribed for by A. Total cost of investments at the year end will be Rs. Show Answer

Q56) A Ltd. acquired 2,000 equity shares of Omega Ltd., on cum-right basis at Rs.75 per share. Subsequently, omega Ltd. made a right issue of 1 : 1 at Rs.60 per share, which was subscribed for by A. Total cost of investments at the year end will be Rs Show Answer

Q57) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (ex-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December. Show Answer

Q58) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (cum-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December. Show Answer

Q59) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (ex-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December. Show Answer

Q60) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (ex-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Price paid by XYZ towards capital is
Show Answer

Q61) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (ex-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Total payment made by XYZ is
Show Answer

Q62) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.101 (cum-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Price paid by XYZ towards capital is
Show Answer

Q63) XYZ buys 200 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.101 (cum-interest) on 1-3-2012 from ABC. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Total payment made by XYZ is
Show Answer

Q64) ABC sells 100 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (ex-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Nominal Value of investments sold is
Show Answer

Q65) ABC sells 100 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (ex-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Amount received towards capital is
Show Answer

Q66) ABC sells 100 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.101 (cum-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Amount received towards capital is
Show Answer

Q67) ABC sells 100 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (ex-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Total amount received is
Show Answer

Q68) ABC sells 100 Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.101 (cum-interest) on 1-3-2012 to XYZ. Interest @ 12% p.a. is to be paid half-yearly on 30th June and 31st December.
Total amount received is
Show Answer

Q69) XYZ buys Debentures of nominal value of Rs.100 each of ICICI Ltd. at Rs.98 (ex-interest) on 1-3-2012 from ABC. Interest of Rs.400 has accrued from the last due date till the date of purchase.
In the entry for recording this investment in the books of XYZ
Show Answer