MCQs on Liquidation of Companies
Multiple Choice Questions and Answers 2024
In this page, you will get MCQs on Liquidation of Companies which are asked in B. Com and Various Professional Exams Like CA/CMA and CS.
Also All the MCQs type Questions asked in Dibrugarh University, Gauahti University and Assam University Exams are included.
We update this page frequently to add new questions. Chapter wise Corporate Accounting MCQs are also included in this post.
Introduction to Liduidation of Companies
A company comes into being through a legal process and also comes to an end by law. Liquidation is the legal procedure by which the company comes to an end. Thus a company being a creation of law cannot die a natural death. A company, when found necessary, can be liquidated.
Choose the correct answer to the following
questions from the given alternatives:
1. Voluntary winding up:
a) If period fixed for the company is expired.
b) If company passes a special resolution the
company wound up voluntarily.
c) Members voluntary winding up is applicable to
solvent companies only.
d)
All of the above.
Ans: d) All of the above.
2. Compulsory winding up:
a) If a company unable to pay its debt.
b) If the number of members of company reduced
below statutory limit.
c) If a company does commence its business within a
year from its incorporation.
d)
All of the above.
Ans: d) All of the above.
3. The first item in order of payment to be made by
liquidator is:
a) Secured creditors.
b) Preferential creditors.
c)
Liquidation expenses.
d) Preferential creditors.
Ans: c) Liquidation expenses.
4. Liquidator’s statement of receipts and payment
is known as:
a) Cash flow statement.
b) Cash book.
c)
Liquidator’s final statement of account.
d) Deficiency account.
Ans: c) Liquidator’s final statement of account.
5. A contributory is
a) A creditor.
b)
A shareholder.
c) A debenture holder.
d) A convertible debenture holder.
Ans: b) A shareholder.
6. A past member is not liable to contribute:
a) In respect of any liability contracted after he
ceased to be member of the company.
b) One year passed since he ceased to be a member.
c) In case of company limited by shares, no
liability arises if shares are fully paid up.
d)
All of the above.
Ans: d) All of the above.
7. Which of the following is not a preferential creditors?
a) All sum due to employee from a provident fund,
pension fund, gratuity fund or any other fund maintain for welfare of employee.
b) Compensation under workmen’s compensation act.
c) Amount due under employees’ state insurance act
for 12 months previous to the winding up.
d)
Amount due to employee under amalgamation or reconstruction.
Ans: d) Amount due to employee under amalgamation
or reconstruction.
8. Salaries due to clerk is preferential for a
period not exceeding:
a) Two months.
b) Three months.
c)
Four months.
d) Fine months.
Ans: c) Four months.
9. Maximum ___________ can be treated as
preferential salary and wages.
a)
20000.
b) 25000.
c) 30000.
d) 40000.
Ans: a) 20000.
Also Read: Corporate Accounting MCQs Chapterwise
Issue and Redemption of Debentures MCQs
Redemption of Preference Shares MCQs
Amalgamation and External Reconstruction MCQs
MCQs on Liquidation of Companies
10. “B” List of contributories are not liable:
a) If shares are fully paid up.
b) For liabilities after they are ceases to be
member of the company.
c) If present shareholders paid the unpaid amount
of the shares transferred by them.
d)
All of the above.
Ans: d) All of the
above.
State the following statements whether ‘true’ or
‘false’
11. The preference shareholders are legally
entitled to the repayment of capital in the event of liquidation of the
company. False
12. A company being a creation of law cannot die a
natural death. It comes to an end by law through the process of liquidation.
True
13. If a company makes a default in delivering the
statutory report to the registrar or in holding the statutory meeting, then
company is compulsorily wound up by the
court. True
14. Creditors voluntary winding up applies to insolvent
companies. True
15. Liquidator of the company is responsible for
realisation of assets and distribute the proceeds amongst the right claimants. True
16. Present members are included in “A” list of
contributories. True
17. The holder of fully paid shares are also
treated as contributories even though they are not to contribute to the assets
of the company. True
18. Past members are included in “B” list of
contributories. True
19. Preference shareholders are legally entitled to
the repayment of capital in the event of liquidation of the company. False
20. The liquidator has a legal right of forfeiting
the shares of those who fail to pay the amount
due. True
21. Interest on liabilities is to be paid upto the
date of actual payment in case of solvent companies and upto date of
commencement of insolvency in case of insolvent
company. True
22. Calls in advance on shares have priority over
payment of paid up share capital of that
class. True
23. All revenue, taxes due to government within 12
months before the date of commencement of winding up is preferential.
True
24. Salaries due to director, manager, secretary
etc. are preferential. False
25. Amount due to workman is rank with secured
creditors in the event of liquidation of the
company. True
26. Workman means any person employed in any
skilled or unskilled, manual, supervisory (wages less than 1600 p.m.),
technical work. True
27. A creditor for Rs. 10000 holding a charge on
the stock of the book value Rs. 12000 (Market value Rs. 8000) is called Partly
secured creditors.
28. Liquidator is appointed by
|
Court |
In case of compulsory
winding up |
|
Members |
Members voluntarily
winding up |
|
Creditors and Members |
In case of creditors
voluntarily winding up |