Chapter 9- Accounts of company

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ACCOUNTS OF COMPANY

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The Financial Statements of a company shall be in accordance with *

10 points

Accounting Standards

Auditing Standards

Secretarial Standards

All the above

The company may keep its books of accounts or other relevant papers in electronic mode. *

10 points

True

False

All of the above

None of the above

Where the financial statements do not comply with the accounting standards, the company shall disclose in its financial statements *

10 points

the deviation from the accounting standards

the reasons for such deviation

the financial effects arising out of such deviation

All of the above.

The accounts of a company can be re- opened if *

10 points

An application is made by CG

An application is made by SEBI

An application is made by Income Tax Authorities

All of the above

Under what situation can the books of accounts of any company be re- opened *

10 points

an order is made by a court of competent jurisdiction or the Tribunal to the effect that the relevant earlier accounts were prepared in a fraudulent manner

On the collective decision of Board of Directors

Cannot be re- opened

None of the above

How many times can revised financial statements be filed? *

10 points

Infinite

Once a year

Twice a year

Thrice a year

Which areas can be revised once the Financial Statements are laid before the company in General Meeting? *

10 points

The correction in respect of which the previous financial statement or report do not comply with the provisions of section 128 or section 134

The correction in respect of which the previous financial statement or report do not comply with the provisions of section 129 or section 134

The correction in respect of which the previous financial statement or report do not comply with the provisions of section 130 or section 134

None of the above

What are the declarations made in the Director’s Responsibility Statement? *

10 points

In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures

The directors had prepared the annual accounts on a going concern basis

The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

All of the above

What amount has to be spent in CSR Activities? *

10 points

At least 2% of the average net profits of the company made during the 3 immediately preceding financial years

At least 3% of the average net profits of the company made during the 3 immediately preceding financial years

At least 5% of the average net profits of the company made during the 3 immediately preceding financial years

None of the above

Can the CG prescribe the manner of circulation of Financial Statements? *

10 points

Yes

Not Applicable

None of the Above

Which of the companies are required to appoint an Internal auditor? *

10 points

Turnover of 100 crore rupees or more during the preceding financial year

Turnover of 200 crore rupees or more during the preceding financial year

Turnover of 300 crore rupees or more during the preceding financial year

None of the above

Every company shall prepare and keep its branch’s books of account and other relevant books and papers and financial statement for every financial year at its- *

10 points

Registered office

Branch office

Corporate Office

All of the above

Where a company has a branch office outside India proper books of accounts are to be kept at: *

10 points

Registered office only

At that Branch and proper summarized returns periodically relating to transactions are sent to registered office

Corporate Office

All of the above.

Company XYZ is in existence since past 4 years, books of accounts should be maintained for how many years? *

10 points

2 Years

3 Years

4 Years

8 Years

Can the books of accounts be kept at a place other than the registered office of the company? *

10 points

Yes with permission of the Central government

Yes, with the permission of the Tribunal

Yes, as the Board of Directors deem fit, under notice to the Registrar within 7 days of the decision.

Mr. A, Managing Director of the company was in-charge of complying with the sections of 128 of the Companies Act, 2013 i.e. books of accounts but he contravened the provisions and thus is punishable with a minimum fine of – *

10 points

Rs 5000

Rs 25000

Rs 50000

Rs 10000

Books of accounts includes: *

10 points

Books of accounts maintained in paper form

Books of accounts maintained in electronic form

Books of accounts maintained in paper or electronic form

Books of accounts maintained in paper and electronic form

Cash Flow statement is not required to be prepared for: *

10 points

Holding Company

Public Company

Dormant Company

All of the above

In case of company with share capital, financial statements shall be sent in a period less than 21 days if: *

10 points

Members not less than 85% of the paid up share capital give their assent

Members not less than 90% of the paid up share capital give their assent

Members not less than 95% of the paid up share capital give their assent

It cannot be sent in shorter notice

The books of accounts of every company shall be maintained in order for *

10 points

3 Years

5 years

8 years

10 years

A company can re- open / recast its book of accounts on application to Tribunal made by *

10 points

Registrar

Member

Board of Directors

Income –tax authorities

Revision of financial statements can be made of any of ___ preceding financial years: *

10 points

CSR Committees of the Board shall consists of: *

10 points

Directors forming 1/3rd of the total no. directors.

Atleast 2 directors

3 or more directors

3 or more directors, out of which atleast 1 director shall be an independent.

Provisions of CSR are applicable to *

10 points

Companies with net worth of 500 crore or more

Companies with turnover of 1000 crore or more

Companies with net profit of 5 crore or more in any financial year

All of the above

Which of the following activities would qualify as CSR: *

10 points

Activities undertaken by the company in the normal course of business

Contribution to political party

Rural development projects

All of the above

CSR Expenditure including expenditure on administrative overheads shall not exceed ______ of total CSR expenditure: *

10 points

12%

OPC shall file a copy of the duly adopted financial statements to registrar in *

10 points

30 days of the date of meeting in which it was adopted

90 days of the date of meeting in which it was adopted

90 days from the closure of the financial statement

180 days from the closure of the financial statement

Companies required to appoint an internal auditor: *

10 points

Listed Company

Unlisted Public company having up share capital not less than Rs. 50 crore during the preceding financial year

Private Company having turnover not less than Rs. 200 crore during the preceding financial year

All of the above

Who can be appointed as an internal auditor? *

10 points

Chartered Accountants

Cost accountants

Any other professional

All of the above

From the following information in respect of company ABC Ltd., compute the amount the company is required to spend on account of Corporate Social Responsibility: FY 14-15; Net profit- 30 Cr. FY 15-16; Net profit- 22 Cr; FY 16-17; Net profit- 27 Cr *

10 points

26 Crore

52.67 Lacs

55 Lacs

26 Lacs

According to Section 2(1 2) of the Companies Act, 2013, “Book and paper” and “book or paper” include books of account, deeds, vouchers, writings, documents, minutes and registers maintained on paper or in electronic form. *

10 points

True

False because it includes all other things except minutes and registers

False because it excludes the documents in electronic form

False because it cannot include deeds and other writings.

XYZ Limited is an incorporated public limited closely held company, carrying out textiles business. You are the CFO of the company and the company seeks the advice from you regarding maintenance of books of account. You are advising them that books of account of every company relating to a period of not less than __________ years immediate)), preceding the financial year, along with relevant vouchers shall be maintained according to Section 128 of Companies Act, 2013. *

10 points

Five

Seven

Eight

Twelve

According to the provisions of the Companies Act, 2013, back-up of the books of account and other books and papers of the company maintained in electronic mode, including at a place outside India, if any, shall be kept _____ on a periodic basis. *

10 points

Servers physically located in any part of the world, however, the records must be accessible at least by cloud-based service in India

In servers physically located in India, America, UK or Europe

In servers physically located in India

In servers physically located in any part of the world except the natural calamity prone zone

According to the provision to Section 2(40) of the Companies Act, 2013, The financial statement, with respect to One Person Company, small company and dormant company, may not include the _________. *

10 points

Balance sheet

Profit and loss account

Cash flow statement

Notes to accounts

The financial statement must be accompanied by ______ giving details as prescribed under section 134 of Companies Act, 2013. *

10 points

Report of the Board of Directors

Management Discussion and Analysis

Financial Highlights

Past 3 years of comparable financial statements

In case of Section 8 (licensed i.e. non-profit) companies, the financial statement shall be sent not less than-____ days in advance. *

10 points

Seven

Fourteen

Twenty-one

Forty-five

As per section 136(1) Act, 2013, audited financial statement can be given less than 21 clear days before date of general meeting, with Consent of majority in number entitled to vote and who represent not less than _____ of such part of paid up share capital of the company as gives a right to vote at meeting. *

10 points

20%

51%

75%

95%

Section 101 of the Companies Act, 2013 relates with _______ to be sent 21 days in advance to the members while Section 136(1) of the Companies Act, 2013 relates with _____ to be sent not less than 21 days before the date of the meeting. *

10 points

Notice of the AGM; Financial Statements

Financial Statements; Notice of the AGM

Notice of the Board Meeting; Notice of the AGM

Notice of the Board Meeting; Financial Statements

The provisions of consolidated financial statements are not applicable in case of companies having only associate companies and Joint Ventures but no subsidiaries. *

10 points

True

False because subsidiary includes associate companies and joint ventures

False because it is not applicable to companies having subsidiaries and associates but no joint ventures

False because it is not applicable to companies having subsidiaries only.

From the following, who are eligible to request inspection of the documents (financial statements, director's report, auditor's report, notes to accounts etc. and other related documents) at the company's registered office during business hours, under Section 136(2) of the Companies Act, 2013? *

10 points

Shareholders, Debenture Holders, Trustees

Shareholders, Trustees, Suppliers, Customers

Shareholders, Suppliers, Customers, Income Tax Officers

Debenture Holders, Suppliers, Other Creditors, Customers

If it appears to the directors of a company that (a) The financial statement of the company; or (b) Report of the Board, do not comply with the provisions of section 129 or section 134 of Companies Act, 2013, they may prepare revised financial statement or a revised report in respect of any of the three preceding financial years. Which of the following is not correct regarding this type of revision? *

10 points

Such revision can be done after obtaining approval of the NCLT on an application made by the company in prescribed form and manner.

A copy of the order passed by the NCLT shall be filed with the Registrar.

NCLT shall give notice to the Central Government and the income-tax authorities and shall take into consideration the representations before passing any order for amending financial statements.

Such revised financial statement or report can be prepared or filed maximum three times a financial year

Which of the following statements is not true with respect to appointment of the internal auditor of a company? *

10 points

Appointment of internal auditor can be only in Board meeting and not by circular resolution. However, if such appointment is made by circular resolution due to urgency, Board can ratify the same.

Chartered Accountant or Cost Accountant can be appointed as internal auditor only if he holds Certificate of Practice

A Cost Auditor of a company cannot be appointed as Internal Auditor of a company even if he is appointed as Cost Auditor only for some of the products of the company.

A statutory auditor of the company cannot be appointed as Internal Auditor.

Which of the following statement(s) is /are correct with reference to provisions under Companies Act, 2013? *

10 points

A company may also collaborate with other companies for undertaking projects or programs or CSR activities in such a manner that the CSR Committees of respective companies are in a position to report separately on such projects or programs.

The CSR projects, programs, or activities undertaken in India or out of India shall amount to CSR Expenditure

Both of the above

None of the above

Which of the following statement(s) is/are correct with reference to provisions under Companies Act, 2013? *

10 points

The CSR projects, programs, or activities that benefit only the employees of the company and their families shall be considered as CSR activities in accordance with section 135 of the Act.

Contribution of any amount directly or indirectly to any political party under section 182 of the Act, shall not be considered as CSR activity.

Both of the above

None of the above

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