Accounting - Study Mode

[#2251] Which of the following is (are) type(s) of Public Limited Companies?
Correct Answer

(D) Both listed and non listed companies

Explanation

Solution: Listed companies are public limited companies with shares quoted and traded on a recognized stock exchange. Due to such type of conditions, these companies are regulated highly by the laws and regulations of the stock exchange, where they have to make disclosures towards the public relating to their financial condition. Non-listed companies are also public limited companies, but their shares are not quoted and traded on any stock exchange. These companies do not need to offer such an intensity of public disclosures as the listed companies, but they still maintain the essential qualities of the public companies, where at least seven shareholders can be identified . Public limited companies Therefore, the public limited companies may either be listed companies or non-listed companies based on their shares being traded in a public forum. Private limited companies Private limited companies are different from the public limited companies in which, ownership is relatively more controlled by limited persons and the shares are not allowed to be sold in a public forum.

[#2252] The charter of a company which defines the limitations and powers of the company is called
Correct Answer

(A) Memorandum of Association

Explanation

Solution: The memorandum of association of a company is the charter and defines the limitation of the power of the company established under Companies Act. Memorandum of Association is the most important document of a company. It states the objects for which the company is formed. It contains the rights, privileges and powers of the company. Hence it is called a charter of the company. It is treated as the constitution of the company. It determines the relationship between the company and the outsiders.

[#2253] Merchandise on hand at either the beginning or end of the accounting period is called
Correct Answer

(D) Inventory

Explanation

Solution: Merchandise on hand at either the beginning or end of the accounting period is called Inventory. Inventory is the array of finished goods or goods used in production held by a company. Inventory is classified as a current asset on a company's balance sheet, and it serves as a buffer between manufacturing and order fulfillment.

[#2254] Which of the following items of balance sheet are useful in evaluating a company's liquidity?
Correct Answer

(B) Current liabilities and current assets

Explanation

Solution: Current liabilities and current assets items of balance sheet are useful in evaluating a company's liquidity.

[#2255] Which of the following can be distributed among the shareholders?
Correct Answer

(B) General reserve

Explanation

Solution: General reserve can be distributed among the shareholders. General reserve can be used for distribution of dividend among shareholders when profit is insufficient. Reserves and surpluses are shown in liabilities side of balance sheet.