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