1. Under which Act is a company defined in India?
a) Indian Contract Act, 1872
b) Companies Act, 2013
c) Partnership Act, 1932
d) Limited Liability Partnership Act, 2008
Answer: b) Companies Act, 2013
2. Section 2(20) of the Companies Act, 2013 defines a company as:
a) A body corporate registered abroad
b) Company formed and registered under this Act or an existing company
c) Sole proprietorship
d) A voluntary association of individuals
Answer: b) Company formed and registered under this Act or an existing company
3. What does "existing company" mean under the Companies Act, 2013?
a) A company formed today
b) A company registered under any of the former Companies Acts
c) A government undertaking
d) A partnership firm
Answer: b) A company registered under any of the former Companies Acts
4. A company is an example of which type of person?
a) Natural person
b) Artificial person
c) Illegal person
d) Cooperative person
Answer: b) Artificial person
5. Which characteristic of a company allows it to continue even if all its members die?
a) Transferability of shares
b) Limited liability
c) Perpetual succession
d) Separate legal entity
Answer: c) Perpetual succession
6. Who manages the company on behalf of the shareholders?
a) CEO
b) Board of Directors
c) Auditors
d) Shareholders themselves
Answer: b) Board of Directors
7. Which of the following is NOT a characteristic of a company?
a) Unlimited liability of members
b) Distinct legal entity
c) Perpetual succession
d) Ownership divorced from management
Answer: a) Unlimited liability of members
8. In case of a company, the liability of the members is:
a) Unlimited
b) Limited to the extent of the face value of shares held
c) Joint and several
d) Dependent on management’s discretion
Answer: b) Limited to the extent of the face value of shares held
9. A shareholder of a company is:
a) An agent of the company
b) Not an agent of the company
c) Automatically the manager
d) Liable for company’s debts personally
Answer: b) Not an agent of the company
10. Can a company own property in its own name?
a) No, property must be owned by shareholders
b) Yes, as a legal person
c) Only immovable property
d) Only if it is a private company
Answer: b) Yes, as a legal person
11. What is meant by transferability of shares?
a) Shares cannot be transferred
b) Shares can be freely transferred (except in Private Companies)
c) Shares are destroyed after transfer
d) Only directors can transfer shares
Answer: b) Shares can be freely transferred (except in Private Companies)
12. The divorce between ownership and management in a company is mainly because:
a) Shareholders are lazy
b) Shareholders manage directly
c) Board of Directors manage the company
d) Company law restricts management by owners
Answer: c) Board of Directors manage the company
13. A company can sue and be sued in:
a) Director’s name
b) Company’s own name
c) Shareholder’s name
d) Promoter’s name
Answer: b) Company’s own name
14. Which of the following best describes the nature of a company’s existence?
a) Temporary
b) Linked to members’ lives
c) Independent of members’ lives
d) Same as a partnership firm
Answer: c) Independent of members’ lives
15. A company is formed mainly for:
a) Social service
b) Religious purposes
c) Political activities
d) Carrying on business for profit
Answer: d) Carrying on business for profit
16. In a company limited by shares, the liability of shareholders is limited to:
a) Unlimited liability
b) The amount unpaid on their shares
c) A fixed amount set by directors
d) Entire debt of the company
Answer: b) The amount unpaid on their shares
17. In a company limited by guarantee, the liability of shareholders is limited to:
a) The face value of shares held
b) The amount they have guaranteed
c) Unlimited liability
d) Market value of shares
Answer: b) The amount they have guaranteed
18. In an unlimited company, the liability of shareholders is:
a) Limited to shares held
b) Limited to guarantee given
c) Unlimited
d) Dependent on director’s discretion
Answer: c) Unlimited
19. A Private Company under Section 2(68) must:
a) Restrict the right to transfer its shares
b) Have minimum 500 members
c) Invite public to subscribe shares
d) Have shares listed on a stock exchange
Answer: a) Restrict the right to transfer its shares
20. What is the maximum number of members allowed in a Private Company (excluding One Person Company)?
a) 50
b) 100
c) 200
d) 500
Answer: c) 200
21. Which of the following is prohibited in a Private Company?
a) Paying dividends
b) Inviting the public to subscribe for securities
c) Buying assets
d) Opening a bank account
Answer: b) Inviting the public to subscribe for securities
22. A Public Company must:
a) Be a private company
b) Restrict transfer of shares
c) Have minimum paid-up capital as prescribed
d) Have less than 200 members
Answer: c) Have minimum paid-up capital as prescribed
23. A company having only one member is called:
a) Private Company
b) One Person Company
c) Public Company
d) Listed Company
Answer: b) One Person Company
24. As per Companies Act, a Small Company must have a turnover not exceeding:
a) ₹10 crores
b) ₹100 crores
c) ₹40 crores
d) ₹4 crores
Answer: c) ₹40 crores
25. The paid-up capital limit for a Small Company must not exceed:
a) ₹1 crore
b) ₹2 crores
c) ₹4 crores
d) ₹10 crores
Answer: c) ₹4 crores
26. A Section 8 Company primarily engages in:
a) Trading activities
b) Manufacturing activities
c) Promotion of social welfare, education, charity, etc.
d) Banking and Insurance services
Answer: c) Promotion of social welfare, education, charity, etc.
27. Section 8 Companies are prohibited from:
a) Buying property
b) Paying dividend to members
c) Conducting business activities
d) Hiring employees
Answer: b) Paying dividend to members
28. A company whose securities are listed on a recognized stock exchange is called a:
a) Private Company
b) Small Company
c) Listed Company
d) Guarantee Company
Answer: c) Listed Company
29. In a company, who is responsible for managing the day-to-day business activities?
a) Shareholders
b) Board of Directors
c) Creditors
d) Auditors
Answer: b) Board of Directors
30. Accounting in a company helps mainly to:
a) Promote the company brand
b) Report how resources have been utilized to shareholders and stakeholders
c) Appoint new directors
d) Avoid taxation
Answer: b) Report how resources have been utilized to shareholders and stakeholders
31. In a company form of organisation, the accounting process is:
a) Unregulated
b) Highly regulated and guided by pronouncements
c) Based solely on management’s decision
d) Completely optional
Answer: b) Highly regulated and guided by pronouncements
32. In company accounting, alternative treatments of transactions are:
a) Encouraged
b) Limited or completely avoided
c) Chosen by directors freely
d) Promoted for flexibility
Answer: b) Limited or completely avoided
33. The constituents of periodical accounts in companies, like income statement and balance sheet, are:
a) Decided by auditors
b) Specified by law
c) Chosen randomly
d) Not mandatory
Answer: b) Specified by law
34. In company accounting, the format of financial statements is:
a) Principle-based
b) Rule-based and fixed
c) Freely customizable
d) Only suggested, not mandatory
Answer: b) Rule-based and fixed
35. In company accounting, compliance with prescribed rules and regulations is:
a) Optional
b) Flexible
c) Paramount and mandatory
d) Recommended but not enforced
Answer: c) Paramount and mandatory
36. Which Act primarily governs accounting in a company form of organisation in India?
a) Income Tax Act, 1961
b) Companies Act, 2013
c) Securities Contracts Regulation Act, 1956
d) GST Act, 2017
Answer: b) Companies Act, 2013
37. Which Chapter of the Companies Act, 2013 deals with "Accounts of Companies"?
a) Chapter VII
b) Chapter IX
c) Chapter XI
d) Chapter XIII
Answer: b) Chapter IX
38. The Companies (Accounts) Rules, 2014 mainly provide rules regarding:
a) Tax filing
b) Shareholder meetings
c) Accounting and maintenance of accounts
d) Employee salaries
Answer: c) Accounting and maintenance of accounts
39. As per Section 133 of Companies Act, 2013, which two sets of accounting standards are applicable in India?
a) IFRS and US GAAP
b) Only Accounting Standards (AS)
c) Accounting Standards (AS) and Indian Accounting Standards (Ind AS)
d) None of the above
Answer: c) Accounting Standards (AS) and Indian Accounting Standards (Ind AS)
40. For banking, insurance, electricity companies, and NBFCs, accounting is governed by:
a) Only Companies Act, 2013
b) Special Acts and Rules in addition to or in suppression of Companies Act
c) Only Accounting Standards
d) Only RBI Regulations
Answer: b) Special Acts and Rules in addition to or in suppression of Companies Act
41. As per Section 2(12) of the Companies Act, 2013, "book and paper" includes:
a) Only books of account
b) Books of account, deeds, vouchers, writings, documents, minutes and registers
c) Only documents related to shares
d) Only accounting ledgers
Answer: b) Books of account, deeds, vouchers, writings, documents, minutes and registers
42. Under Section 2(13), "books of account" must record all except:
a) Sales and purchases
b) Personal expenses of directors
c) Sums of money received and expended
d) Assets and liabilities
Answer: b) Personal expenses of directors
43. In a company, Cash Book and Ledger are maintained primarily for recording:
a) Sales of goods
b) Money received and expended
c) Directors’ meetings
d) Loans taken
Answer: b) Money received and expended
44. Which section allows maintenance of books of accounts in electronic mode?
a) Section 92
b) Section 128
c) Section 148
d) Section 2(13)
Answer: b) Section 128
45. Statutory books must be maintained:
a) Only when asked by shareholders
b) As per requirement of the Companies Act
c) As per auditor's discretion
d) Only when profit exceeds a threshold
Answer: b) As per requirement of the Companies Act
46. Which of the following is a statutory book?
a) Memorandum of Association
b) Articles of Association
c) Register of Members
d) Directors’ Personal Diary
Answer: c) Register of Members
47. The Register of Charges records:
a) Minutes of meetings
b) Company loans and securities given
c) Director’s personal investments
d) Salary of key employees
Answer: b) Company loans and securities given
48. Register of Debenture Holders is:
a) An optional record
b) Mandatory for companies issuing debentures
c) Required only for public companies
d) Maintained by banks
Answer: b) Mandatory for companies issuing debentures
49. Which section of Companies Act, 2013 deals with Annual Return?
a) Section 128
b) Section 148
c) Section 92
d) Section 133
Answer: c) Section 92
50. Annual Return contains information related to:
a) Only balance sheet items
b) Only directors’ salaries
c) Shares, debentures, members, meetings and penalties
d) Profit and loss account only
Answer: c) Shares, debentures, members, meetings and penalties
51. The Annual Return should be signed by:
a) Only the director
b) Director and Company Secretary
c) Chief Financial Officer
d) Auditor
Answer: b) Director and Company Secretary
52. In case of a One Person Company (OPC), the Annual Return must be signed by:
a) Two directors
b) Company Secretary or Director
c) Auditor
d) Registrar of Companies
Answer: b) Company Secretary or Director
53. A company must file its Annual Return with the Registrar within:
a) 30 days from AGM
b) 60 days from AGM
c) 90 days from AGM
d) 120 days from AGM
Answer: b) 60 days from AGM
54. If no Annual General Meeting (AGM) is held, the Annual Return must still be filed within 60 days:
a) From the date when AGM should have been held
b) After getting approval from Tribunal
c) From the financial year-end
d) None of the above
Answer: a) From the date when AGM should have been held
55. Annual Return must also mention penalties or punishments imposed on:
a) Only the company
b) Company and its Directors or Officers
c) Only shareholders
d) Only external auditors
Answer: b) Company and its Directors or Officers
