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Created on March 24, 2026 By

CA Sonal Saboo

CMA Inter

Inter CA&A PN-10 Quiz 1

This quiz is based on the CMA Corporate Accounting and Auditing paper.
Each question is multiple-choice with 4 options, and only 1 option is correct.
Attempt the quiz to test your understanding of CMA CAA concepts.

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Category: Corporate Accounting and Auditing PN-10

1. The financial statements of company shall be in the from provided in .

a. Schedule IV

b. Schedule III

c. Schedule V

d. Schedule VI

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Category: Corporate Accounting and Auditing PN-10

2. Redeemable Preference Shares of Rs. 1,00,000 are redeemed at a premium of 5% for which purpose fresh equity capital of Rs.40,000 is issued at par. What amount should be transferred to Capital Redemption Reserve account?

a. Rs.40,000

b. Rs.1,05,000

c. Rs.65,000

d. Rs.60,000

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Category: Corporate Accounting and Auditing PN-10

3. Shares can be forfeited .

a. For failure to attend meetings

b. For failure to repay the loan to the bank

c. For non-payment of call money

d. For which shares are pledged as a security

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Category: Corporate Accounting and Auditing PN-10

4. Forfeiture of shares results in the reduction of .

a. Authorised capital

b. Reserve capital

c. Paid-up capital

d. Fixed assets

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Category: Corporate Accounting and Auditing PN-10

5. When shares are forfeited, the share capital account is debited with .

a. Called-up value of shares

b. Nominal value of shares

c. Market value of shares

d. Paid-up value of shares

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Category: Corporate Accounting and Auditing PN-10

6. is the amount of share capital that a company is permitted to issue.

a. Issued Share Capital

b. Authorized Share Capital

c. Subscribed Capital

d. Paid up Capital

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Category: Corporate Accounting and Auditing PN-10

7. The balance appearing in the books of a company at the end of year were:

CRR A/c = Rs.50,000

Securities Premium = Rs.5,000 Revaluation Reserve = Rs.20,000 Profit & Loss A/c (Dr.) = Rs.10,000

Maximum amount available for bonus shares will be

a. Rs.50,000

b. Rs.55,000

c. Rs.45,000

d. Rs.57,000

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Category: Corporate Accounting and Auditing PN-10

8. The notice of the meeting at which the special resolution is proposed to be passed relating to buy back of shares shall be accompanied by an explanatory statement stating –

a. Full and complete disclosure of all material facts

b. Analysis of debt equity

c. Gross profit ratio before buy back

d. Chairman’s view on buy back

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Category: Corporate Accounting and Auditing PN-10

9. Following information is available from the audited balance sheet of TH Ltd.:

Equity Shares Capital (3,000 lakh share of Rs.10 each) – Rs.30,000

Securities Premium Account - Rs.3,000 General Reserve – Rs.10,000

Secured Loans – Rs.40,000

Unsecured Loans - Rs.22,000

Compute the maximum limits up to which buy back is permitted in the financial year 2022 – 23.

a. 800 lakh shares

b. 1075 lakh shares

c. 500 lakh shares

d. 400 lakh shares

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Category: Corporate Accounting and Auditing PN-10

10. Following are the extract of balance sheet of Light Co. Ltd.

Equity share of Rs.10 each - Rs.10,00,000

Security Premium – Rs.2,40,000

Reserve – Rs.7,50,000

Profit & Loss Account – Rs.2,80,000

Bank - Rs.9,10,000

Non Trading Investments – Rs.4,20,000 Company brought back 15,000 shares at Rs.40 each.

The transaction in respect of buy back was financed by sale of 2/3rd of non-trade investment for Rs.5,90,000 Amount to be transferred to capital redemption reserve is .

a. Rs.6,00,000

b. Rs.1,00,000

c. Rs.4,50,000

d. Rs.1,50,000

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Category: Corporate Accounting and Auditing PN-10

11. Equity shares amounting to Rs.2,00,000 are brought back at a premium of 5%, by issue of preference shares amounting to Rs.1,00,000 at a premium of 10%. Compute the amount to be transferred to Capital Redemption Reserve.

a. Rs.1,00,000

b. Rs.90,000

c. Rs.1,50,000

d. Rs.50,000

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Category: Corporate Accounting and Auditing PN-10

12. No offer of buy-back shall be made within a period of reckoned from the date of the closure of the preceding offer of buy-back .

a. 6 months

b. 1 year

c. 2 years

d. 10 months

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Category: Corporate Accounting and Auditing PN-10

13. Where a company purchase its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to the .

a. Capital Reserve Account

b. General Reserve Account

c. Capital Redemption Reserve Account

d. Equity Shares Redemption Account

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Category: Corporate Accounting and Auditing PN-10

14. For the purpose of calculating debt equity ratio which of the following debts are considered .

a. Secured debts

b. Unsecured debts

c. Current liabilities

d. All of the above

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Category: Corporate Accounting and Auditing PN-10

15. Section 68 of the Companies Act, 2013 provides that no buy-back of any kind of shares or other specified securities shall be made out of the .

a. Securities premium balance as it stood before buy back

b. Proceeds of an earlier issue of the same kind of shares or same kind of other specified securities

c. General reserve in excess of 15% balance as per latest audited balance sheet

d. Proceeds of issue of specified securities

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Category: Corporate Accounting and Auditing PN-10

16. Company may purchase its own shares or other specified securities out of –

A. Free reserves

B. Securities premium account

C. Proceeds of issue of any shares

D. Proceeds of issue of specified securities

a. A and C only

b. A, b and C only

c. A, C and D only

d. A or B or C or D

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Category: Corporate Accounting and Auditing PN-10

17. Buy-back of equity shares in any financial year should not exceed .

a. 10% of net worth

b. 25% of the aggregate of paid-up capital and free reserves of the company

c. 25% of the paid-up equity capital

d. 25% of the aggregate of paid-up equity capital and preference capital

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Category: Corporate Accounting and Auditing PN-10

18. Provisions relating to buy back of securities are contained in of the Companies Act, 2013.

a. Section 77

b. Section 77A

c. Section 68

d. Section 63

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Category: Corporate Accounting and Auditing PN-10

19. When share is issued at a price equal to its face value, it is called issue .

a. at Par

b. Issue at a Premium

c. Issue at a Discount

d. at Bonus

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Category: Corporate Accounting and Auditing PN-10

20. In case of issue the shares are offered to the existing shareholders of the company without any consideration.

a. Private Placement

b. Rights Issue

c. Bonus Issue

d. Offers for sale

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Category: Corporate Accounting and Auditing PN-10

21. Which of the following is/are not a feature/s of Shares have the following features?

a. It represents the biggest unit of ownership

b. Shares of a specific series must have the same face value

c. Share represents only a partial ownership of Share Capital of the company

d. Each share has a distinct number

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Category: Corporate Accounting and Auditing PN-10

22. Which of the following is not a statutory book of a company?

a. Register of Investments held and their names

b. Annual returns

c. Register of Officers

d. Register of shareholdings of the directors

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Category: Corporate Accounting and Auditing PN-10

23. In India, accounting in of a company form is guided by which of the following regulatory sources?

a. Companies Act, 2013

b. Company Rules

c. Accounting Standards

d. All of these

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Category: Corporate Accounting and Auditing PN-10

24. Which of the following is/are the important feature/s of a company?

a. Accounting process is highly regulated and guided by regulatory pronouncements

b. Constituents of periodical accounts (i.e., income statement, balance sheet etc.) are specified by the law

c. Importance of compliance to the prescribed rules and regulations is paramount

d. All of these

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Category: Corporate Accounting and Auditing PN-10

25. Which of the following is/are not characteristic of a company?

a. It is a distinct legal entity existing independent of its members.

b. It has a perpetual succession.

c. The shares of a company are freely transferable except in case of a Private limited Company.

d. It is a voluntary association of persons usually for social up liftment without expectation of any profit.

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Inter PN-10 CAA Quiz 1

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