Balance Sheet - Quiz

1. Authorized share capital is authorized by ____________ 2. A share in a company that the owner loses (forfeits) by failing to meet the purchase

requirements. 3. __________ is a process a company should follow whenever it goes to public 4. Underwriting is done by a ______________ 5. face value of a share will be accounted in _______________ section of balance sheet 6. share premium is a part of __equity_______________ 7. preference shares wont have ________votingrights________ 8. DVR shares will pay _______higher______ dividends and will be traded at ____lower________ to normal equity shares 9. Book value is calculated as ___earnings____________ per share 10. Convertibles are the instruments that could be converted into _____________ 11. Warrants brings future ______________ to the firm 12. Rights are issued to ______________ shareholders at _____________ 13. Bonus is just a _______________ of reserves 14. Stock split is used to bring the stock price within ________________ range 15. Reverse split is used to reduce the number of shares _________________ 16. Stock option is sold by one party to another that gives the buyer the ___________, but not the ____________, to buy or sell a stock at an agreed-upon price within a certain period or on a specific date. 17. By reducing the number of shares outstanding on the market, __________ increase the proportion of shares a company owns. 18. Redemption means _____________ 19. Capital reserve cannot be used for the purpose of _________________ 20. Revenue reserve is the part of the profit ____________ in the business. 21. Reserve is an ____________________of profit and not an expense 22. Revaluation reserve is an example of _____________ reserve 23. Surplus is liability 24. Deferred tax arises either due to _____________ difference or due to state tax policies 25. When the event is certain, but the amount is not known. We call that as ____________ 26. Contingent liability is one where the incidence of event as well as the amount involved are uncertain 27. When both are certain it is called as accrual 28. Capitalization means treating an expense as ___________________ 29. Amortization is the process of expiration of the _______ of an intangible asset 30. Depreciation is not a _______________ mechanism 31. Intangible assets are assets whose value can only be ___________ 32. When a going concern is purchased, the purchase price paid in excess of the fair value of the assets, is considered to be _________________ 33. Life of intangible assets cannot exceed more than ____________ 34. Lease is treated both as ______________in the balance sheet 35. Related party - entities frequently carry on parts of their activities through subsidiaries, joint ventures and associates. In those circumstances, the entity has the ability to affect the financial and operating policies of the investee through the presence of control, joint control or significant influence. The transactions arising out of these are known to be 36. Internally generated intangibles cannot be recognized in the books of accounts 37. Companies need to record the cost of their Ending Inventory at the lower of cost and NRV, to ensure that their inventory and income statement are not overstated. 38. Provision for Diminution is to made in the case of longterm investments as per the concept of prudence

39. An asset is impaired when its carrying amount exceeds its recoverable amount 40. Current investments are carried in the balance sheet at their ____________LCM 41. Non-current investments are carried in the balance sheet at _____________ 42. Secured loans are the secured against the _____________ of the company 43. when company Y goes into dissolution, the assets over which the charge has been created will be distributed in proportion to the creditors' respective holdings is known as which charge 44. Consortium lending - type of lending in which two or more banks come together to finance the big projects requiring huge amount of money. 45. Preference shares which are entitled to take part in surplus profits, i.e. profit proposed to be distributed among the shareholders after dividend to preference and ordinary shareholders, are termed as participatory preference shares. 46. If unpaid dividend is not carried forward but lapses then such shares are known as non- cumulative preference shares 47. preference shares are redeemable in ten years 48. Encumbered shares shares owned by one party but subject to another partys valid claim are known to be 49. Treasury shares are own shares acquired through a buy back arrangement and held by a company 50. Book building is a Price discovery mechanism 51. Green shoe option - is a clause in the underwriting agreement of an IPO, which allows to sell additional shares, to the public if the demand exceeds expectations 52. NRV, diminution and impairment are done as per the concept of Prudence 53. if a firm believes that some of its debtors may default, it should act on this by making sure that all possible losses are recorded in the books. Pru 54. the fact that the business is separate and distinguishable from its owner is best explained by this concept. Bus.entity 55. everything a firm owns, it also owes it to somebody. This coincidence is explained by this cocept. Dual 56. if a cashier buys a cashbook in which to keep his firms books., he would not try to account for every single sheet of paper in the book because of this concept mat 57. this concept states that if (say) the weighted average method of inventory valuation is used in one year, then it should also be used the nexr year - con 58. a firm may hold a certain stock, which is heavily in demand. Consequently the market value of this stock may be increasing. The normal accounting procedure is to ignore this because of which concept? Cost 59. if we, receive an order for goods, we would not include the value of it in our sales figures yet owing to this concept reali 60. a business makes a loss for the second year running, but a certain concept tells us that if we carry on trading unless we are notified to the contrary. Which concept we are talking about? going 61. profit calculations are based on expenses incurred during the period rather than those paid. This statement effectively describes which concept? accrual 62. the management of X ltd, is remarkably incompetent, but the firms accountant cannot take this into account when preparing the books because of which concept? money measurement 63. the R&D section of X ltd, however is doing so well that they anticipate a huge upturn in the sales next year. The accountants cannot increase the book value of the patents held though, because of this concept. pru 64. the book keeper for X ltd , would only be concerned with that total value of its owners drawings, not with how he had spent it because of which concept? - entity