MCQ on Redemption of Preference Shares: Check the below Corporate and Management Accounting MCQ on Redemption of Preference Shares with Answers Pdf free download. Corporate and Management Accounting MCQ on Redemption of Preference Shares Questions for Corporate and Management Accounting with Answers were prepared based on the latest exam pattern. We have provided Corporate and Management Accounting MCQ on Redemption of Preference Shares with Answers to help students understand the concept very well. Students should practice CS Executive MCQ on Redemption of Preference Shares Questions with Answers based on the latest syllabus.

MCQ on Redemption of Preference Shares

1. A preference share is one that enjoys a:
(A) Preferential right regarding payment of dividend
(B) Preferential right regarding allotment of shares
(C) Preferential right regarding payment of dividend and return of capital
(D) Preferential right regarding the return of capital

2. To whom the bonus shares or rights shares can be issued?
(A) Equity shareholders
(B) Preference shareholders
(C) Both (A) and (B)
(D) Neither (A) nor (B)

3. A preference shareholder can vote
(A) When his special rights as a preference shareholder are being varied
(B) On any resolution for the winding up of the company
(C) When their dividend has not been paid for a period of 2 years or more
(D) All of the above

4. Preference shares are entitled to a
(A) Variable rate of dividend
(B) Fixed rate of dividend
(C) Both (A) and (B)
(D) Neither (A) nor (B)

5. Capital Redemption Reserve Account may be applied to issue
(A) Right shares
(B) Bonus debentures
(C) Bonus to employees of the company
(D) Bonus shares

6. When Redeemable Preference shares are due for redemption, the entry will be
(A) Debit redeemable Preference Share capital A/c; Credit cash A/c
(B) Debit Redeemable Preference share capital A/c; credit Preference shareholders A/c
(C) Debit preference shareholders A/c; credit cash A/c
(D) Debit preference shareholders A/c; credit capital reduction A/c

7. Redeemable Preference shares can be redeemed out of _______.
(A) The sale proceeds of Investments
(B) The proceeds of a fresh issue of shares
(C) Share premium
(D) The proceeds of the issue of debentures

8. No company limited by shares, issue any preference shares which is redeemable after the expiry of a period of _____ from the date of issue.
(A) Ten years
(B) Five years
(C) Twenty years
(D) Twenty five years

9. Which of the following statements is FALSE?
(A) Redeemable preference share can be issued if authorized by the articles of association
(B) The bonus issue can be made out of securities premium collected only in cash
(C) Premium payable on redemption of preference share can be provided of the company’s securities premium
(D) Redeemable preference shares can be redeemed only out of the profits of the company

10. The balance in capital redemption reserve is available for
(A) Issue of fully paid-up bonus shares
(B) Redemption of preference shares
(C) Redemption of debentures
(D) All of the above

11. According to section 52 of the Companies Act, 2013, the amount in the Securities Premium A/c cannot be used for the purpose of:
(A) Issue of fully paid bonus shares
(B) Writing off losses of the company
(C) For purchase of own securities
(D) Writing off commission or discount on issue of shares

12. Which of the following cannot be used for the purpose of creation of a capital redemption reserve account?
(A) Profit& Loss A/c (credit balance)
(B) General Reserve A/c
(C) Dividend Equalization Reserve A/c
(D) Unclaimed Dividends A/c

13. As per the Companies Act, 2013, preference shares that are issued by a company engaged in an infrastructure project can issue preference shares that are redeemable after _____.
(A) 20 years
(B) 40 years
(C) 30 years
(D) 10 years

14. As per the Companies Act, 2013 the companies cannot use the balance of Securities Premium for
(A) Premium on redemption of debentures
(B) Issuing bonus shares
(C) Writing off commission on the issue of shares or debentures
(D) Loss of issue of debentures

15. Unless otherwise stated, a preference share is always deemed to be
(A) Cumulative, participating and non-convertible
(B) Non-cumulative, non-participating, and non-convertible
(C) Cumulative, non-participating and non-convertible
(D) Non-cumulative, participating and non-convertible

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By Team Learning Mantras