Legal Aspects of Finance - 10

Legal Aspects of Finance - 10

Select The Blank
Question A statement of all transactions with the related parties including
the basis shall be placed before the ________.
Correct Answer Audit committee

Multiple Choice Multiple Answer
Question In calculating the limit of all the companies which companies are
excluded?
Correct Answer Foreign companies , Private Companies , Non Profit making
companies

True/False
Question Bonus is an ex gratia payment.
Correct Answer False

Multiple Choice Single Answer
Question The Board is required to give explanation for the adverse remark
given by :-
Correct Answer Auditor


Multiple Choice Multiple Answer
Question Who is an independent director?
Correct Answer Non executive director , Who receives director remuneration ,
Who is not related to the promoters

Multiple Choice Single Answer
Question Who decided about the philosophy and the significance of the
conditions in India?
Correct Answer Supreme court

Multiple Choice Multiple Answer
Question Who is not entitled to bonus?
Correct Answer An apprentice , Employee employed through contractors

True/False
Question Default in placing annual accounts before AGM may result in
imprisonment.
Correct Answer True


Multiple Choice Single Answer
Question Audit committee shall consist of not less than :-
Correct Answer Three directors


Match The Following
Question- Correct Answer
Section 2(vi) -Wages
Wages act- 1936
Factories act -1948
Section 3 of wages act- Every employer
responsible for payment to
employed persons


Multiple Choice Multiple Answer
Question Board of directors have to take consent of general meeting for :-
Correct Answer Sale, lease or dispose of company's property , Give time to
repayment of debt due by director , Contribute to charitable
funds exceeding Rs 50000/- or 5% of average net profits

Multiple Choice Single Answer
Question As per the provisions of Companies Act 1956, no company can
issue preference shares which are irredeemable or redeemable
after a period of :-
Correct Answer 20 years

Multiple Choice Multiple Answer
Question Board may by resolution passed at the meeting delegate the
powers to :-
Correct Answer Committee of directors , Managing director , Manager

Multiple Choice Single Answer
Question Cap on investment by person resident outside India, for Housing
& Real Estate Sector is :-
Correct Answer 1


Multiple Choice Multiple Answer
Question Briefly describe the scheme of the bonus act :-
Correct Answer To impose statutory liability upon every employer to pay bonus
to employees , To define principle of payment of bonus as per
the prescribed formula , To provide payment for minimum and
maximum bonus and link the scheme for set off and set on

True/False
Question Retiring director may be eligible for reappointment.
Correct Answer True


True/False
Question Every company shall have a qualified and independent audit
committee.
Correct Answer True

Multiple Choice Single Answer
Question ECB stands for :-
Correct Answer External Commercial Borrowings

Select The Blank
Question ________shall certify that they have reviewed the balance sheet
and profit and loss account.
Correct Answer CEO


Multiple Choice Single Answer
Question Deductions are authorized under which section?
Correct Answer Section 7(2)

True/False
Question Indian companies can't borrow funds in Rupees.
Correct Answer False


Multiple Choice Multiple Answer
Question WOS are allowed to :-
Correct Answer Pay royalty , Offshore payment , By automatic route

True/False
Question Every company has to appoint an auditor to audit the accounts
of the company and has to fix remuneration to be paid to the
auditor.
Correct Answer True


Multiple Choice Multiple Answer
Question Who are governed by the payment of wages act?
Correct Answer Employed persons , Salary less than 1600 per month

Select The Blank
Question For Special Resolution, votes cast in favour of the resolution
should be ________ times more than votes cast against the
resolution.
Correct Answer 3

True/False
Question Any gratuity payable on termination of employment is included in
wages.
Correct Answer False


Multiple Choice Single Answer
Question Any contract or arrangement in which director is interested has
to be recorded in :-
Correct Answer Register of contracts

Select The Blank
Question Multimodal ________ making remittance to their agents abroad.
Correct Answer Transport operators


Select The Blank
Question The act defines ________ in private sector and public sector.
Correct Answer Establishment


True/False
Question A company can be incorporated with the name using words
Hindustan, India.
Correct Answer True


Multiple Choice Multiple Answer
Question The auditor shall inquire :-
Correct Answer Whether transactions of the company which are represented
merely by book entries are not prejudicial to the interest of the
company or members , Whether loans & advances made by the
company have been shown as deposits , Whether personal
expenses have been charged to revenue account

Select The Blank
Question Director has to vacate his office, if he has been ________ by a
court of any offence involving moral turpitude.
Correct Answer Convicted

Select The Blank
Question If the articles are silent who will be the ________ director of the
company, the subscribers to the members shall deemed to be
directors of the company.
Correct Answer First


True/False
Question Preference share holders are creditors of the company.
Correct Answer False


Multiple Choice Multiple Answer
Question A person can not be appointed as director of the company if :-
Correct Answer He is found to be of unsound mind , He is declared as an
insolvent , He has not taken qualification shares

Question For using the words 'Industry/ Udyog', the minimum authorised
capital should be :-
Correct Answer Rupees One crore

Multiple Choice Single Answer
Question What types of rates can be fixed for different zones and
localities?
Correct Answer Different


Select The Blank
Question To avoid conflicts of interest, ________ committee would
determine the remuneration packages of the executive directors.
Correct Answer Remuneration


Multiple Choice Single Answer
Question Minutes of general meeting are to be finalised and signed within
Correct Answer 30 days

Select The Blank
Question The form should be filled within ________ days from the date of
execution of document.
Correct Answer 30 days

Multiple Choice Single Answer
Question To safeguard the interest of the company or its shareholders or
the public interest, the central government, may appoint such
number of person as directors to hold office for a period not
exceeding :-
Correct Answer 3 years


Multiple Choice Multiple Answer
Question What is the board procedure ?
Correct Answer Meeting to be held 4 times in a year , Should not be a gap of
more than 4 months between 2 meetings , Minimum information
should be made available, Should not be a gap of
more than 4 months between 2 meetings

Select The Blank
Question No loan or investment shall be made or guarantee given by
company unless ________ is passed at the meeting by the
board.
Correct Answer Resolution

True/False
Question Senior managers are members of management, one level below
the executive director.
Correct Answer True


Match The Following
Question- Correct Answer
Bifurcation Voted for/ against Not less than 5 % voting
power

Ordinary resolution -Simple majority

Requisition of members Not less than 5 % voting
power

Form 32
Special resolution Form 23 Form 23

Multiple Choice Multiple Answer
Question Company can take loan from :-
Correct Answer Banks , Financial Institutions , Debenture Holders

Select The Blank
Question ________ includes legal representative of deceased employer.
Correct Answer Employer

Legal Aspects of Finance - 9
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Form no 17 &13 are to be filed when the entire loan amount is
repaid.
Correct Answer True


Multiple Choice Multiple Answer
Question Describe in brief what does the term wages include?
Correct Answer Remuneration under any award , Settlement between the parties
or order of court , Overtime


Select The Blank
Question The definition of ECB in India is partly in alignment with
________ Act.
Correct Answer FERA

True/False
Question Company may have nominee director.
Correct Answer True

Multiple Choice Multiple Answer
Question Board's Report shall include :-
Correct Answer Dividend recommended , Financial position of the company ,
Amounts transferred to Reserves,

True/False
Question Every company has to inform ROC about the place where it
keeps books of account.
Correct Answer False

Multiple Choice Multiple Answer
Question Who is entitled to bonus?
Correct Answer Temporary workmen , Part time employee , Retrenched
employee


Multiple Choice Multiple Answer
Question Debentures can be :-
Correct Answer Redeemable , Convertible , Party convertible and redeemable

True/False
Question A non executive director is not a substantial shareholder of the
company.
Correct Answer True

Select The Blank
Question Liability clause can be found in ________.
Correct Answer Memorandum of Association

Select The Blank
Question Under the industrial disputes act 1947________is an appropriate
government.
Correct Answer Central government


Multiple Choice Multiple Answer
Question Directors' Responsibility Statement refers to :-
Correct Answer Going concern , Accounting policies , Accounting standards

Multiple Choice Multiple Answer
Question The provision related to register are not applicable to :-
Correct Answer Banking company or insurance company , A company whose
principle business is acquisition of shares, stock, debentures or
other securities , A private limited company unless it is a
subsidiary of public company.

True/False
Question A director is not required to take qualification share.
Correct Answer False

Select The Blank
Question The Forms 8 &13 should be filed in ________ to ragistrar of
companies.
Correct Answer Triplicate

Select The Blank
Question Payment of ________ requires registration from RBI.
Correct Answer Royalty

Select The Blank
Question Board has power to receive of notice of ________.
Correct Answer Disclosure of interest


Multiple Choice Single Answer
Question As per the provisions of Companies Act 1956, company can
issue shares with :-
Correct Answer Differential voting rights

True/False
Question Indian companies are exempted from filing a return by ECB-2.
Correct Answer False


Multiple Choice Single Answer
Question When was the factories act passed?
Correct Answer In 1948

Select The Blank
Question If an employer derives profit in any of the first ________ years
he has to pay bonus for that year.
Correct Answer 5

Multiple Choice Single Answer
Question Maximum fine which can be levied for default in placing accounts
before AGM is :-
Correct Answer Rs. 50,000

True/False
Question No person can be appointed as an auditor of the company who
is in full time employment.
Correct Answer True

Multiple Choice Single Answer
Question Which person is responsible for he payment of wages act ?
Correct Answer Managers



Multiple Choice Single Answer
Question The quorum for the board meeting is one third of the total
strength of the board or two whichever is :-
Correct Answer More


Multiple Choice Single Answer
Question Every member of a company limited by shares and holding any
equity share capital therein shall have :-
Correct Answer Right to vote

Multiple Choice Single Answer
Question There should not be a gap of more than 15 months between :-
Correct Answer Two annual general meetings

Multiple Choice Multiple Answer
Question Director can be appointed without counting the number in :-
Correct Answer Private limited company , Unlimited company , Charitable
association

Match The Following
Question -Correct Answer
Dividend balancing -Over 7 years from
production


Investment cap 26% -Insurance

Investment cap 100% -Housing & real estate
Foreign companies- Project office

True/False
Question Wages does not include an amenity or service or special order of
the appropriate government.
Correct Answer True


Multiple Choice Single Answer
Question Define an employed person under section 2 of the act.
Correct Answer Includes legal representative of a deceased employed person

Multiple Choice Single Answer
Question Outside India residents have Automatic Route of RBI for
investments for this activity :-
Correct Answer 26% in Insurance

Multiple Choice Single Answer
Question After incorporation of the company, the first auditor is generally
appointed within :-
Correct Answer One Month

Multiple Choice Single Answer
Question Single director can sign the annual accounts if :-
Correct Answer Only one director in India for the time being

Multiple Choice Multiple Answer
Question The Indian company may issue bonus shares to its non resident
shareholders subject to :-
Correct Answer Held by non resident shareholder , As per acquisition , In the
Form of FC-GPR

Select The Blank
Question ________ is one of the critical matter which should be decided
by the postal ballot.
Correct Answer Corporate restructuring

Multiple Choice Single Answer
Question Companies Act presently implemented and adhered by
companies is :-
Correct Answer Companies Act, 1956

Multiple Choice Multiple Answer
Question The annual accounts of the company are signed on behalf of the
Board by :-
Correct Answer Managing director , Two Directors , Company Secretary

Match The Following
Question -Correct Answer

Audit Report- Opinion on the
examination of books of
accounts

Auditor- A person who conducts
the audits

Qualified for audit- Eligible to conduct the
audit

Cost auditor- A cost accountant, who is
suppose to conduct cost
audit of the company.

Select The Blank
Question WOS can make payment of royalty by ________ route.
Correct Answer Automatic route

Select The Blank
Question Every ________ Company has to hold Statutory Meeting of the
members.
Correct Answer Public


True/False
Question Company can not issue shares with differential voting/ dividend
rights.
Correct Answer False


Multiple Choice Multiple Answer
Question Private Company means a company which :-
Correct Answer Limits number of members , Prohibits invitation to public for
shares , Prohibits invitation to public for deposits


shares , Prohibits invitation to public for deposits
Multiple Choice Single Answer
Question In one financial year other than Nepal & Bhutan the investments
in other countries should not exceed more than :-
Correct Answer US $ 100 Million


Multiple Choice Multiple Answer
Question Conditions on borrowings by PIO are :-
Correct Answer Non-repatriation basis , Loan by inward remittance , Account by
lender in India


Select The Blank
Question The chairman of the audit committee shall attend ________ to
provide clarification on matters relating to audit.
Correct Answer Annual general meeting

Multiple Choice Single Answer
Question What right does the payment of bonus act give ?
Correct Answer Statutory right to share in profits

Legal Aspects of Finance - 8
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question Books of account with respect to following are required to be
kept :-
Correct Answer Sales & purchases of goods , Assets & liabilities , Money
received & expended

Select The Blank
Question Authorized dealer may freely open ________ and allow
remittance for import of goods.
Correct Answer Letter of credit

Multiple Choice Single Answer
Question A director has to vacate his office, if he is adjudged as :-
Correct Answer Insolvent

Select The Blank
Question First AGM should be held within ________ from closure of
financial year.
Correct Answer 9 months

Multiple Choice Single Answer
Question The earlier "Fast Track" investments route has been replaced
by?
Correct Answer Automatic

Multiple Choice Single Answer
Question Payment of wages act came into existence :-
Correct Answer To ensure regular and timely payment of wages to employed
persons

Select The Blank
Question Any payment in respect on ________ can be deducted from
the wages of an employed person.
Correct Answer Fidelity guarantee bond

True/False
Question Directors' Report may contain details/ state of affairs of its
subsidiaries.
Correct Answer True

Multiple Choice Multiple Answer
Question Statutory Report pertains to :-
Correct Answer Funds raised by the company , Utilisation of funds ,
Investments made by the company

Select The Blank
Question The ________ issue shall be by way of public issue.
Correct Answer NCD

Multiple Choice Single Answer
Question In which case did the Bombay high court observe the general
purpose of the act?
Correct Answer Arvind mills ltd case

Select The Blank
Question The shares with differential voting rights shall not exceed
________ of the total share capital issued.
Correct Answer 0.25

Multiple Choice Single Answer
Question What does salary or wage include?
Correct Answer Dearness allowance

True/False
Question A probationer is an employee and as such is not entitled to
business.
Correct Answer False

Multiple Choice Multiple Answer
Question Ordinary business includes :-
Correct Answer Declaration of dividend , Appointment of directors ,
Appointment of auditor

Multiple Choice Multiple Answer
Question Under which circumstances will the worker not receive wages
for full normal working days ?
Correct Answer If failure to work is caused by unwillingness to work , Not by
omission of the employer to provide him with work

Multiple Choice Single Answer
Question Explanatory Statement should be annexed to Notice for :-
Correct Answer Special business

Multiple Choice Multiple Answer
Question Following are the Forms to be submitted to ROC for
incorporation of company :-
Correct Answer Form 29 , Form 1 , Form 32

True/False
Question The Board has power to alter Articles of Association being
internal document.
Correct Answer False

Match The Following
Question -Correct Answer

Internal auditor -Employee of the company

Insolvent -A person who is not in a
position to pay his dues

Moral turpitude- Doing immoral things
Call on share- Demand of remaining part of
share capital value


Multiple Choice Single Answer
Question A person can not be appointed as managing or whole time
director in more than :-
Correct Answer Two companies

Multiple Choice Single Answer
Question To whom does the payment of wages act apply to ?
Correct Answer Persons employed in any factory

True/False
Question There should be a gap of more than 4 months to have the
meeting of the board of directors.
Correct Answer False

Multiple Choice Single Answer
Question What is the minimum salary under which the persons are
covered in this act?
Correct Answer Less than Rs 1600

True/False
Question A General Meeting may also be called by giving shorter notice
than 21 days.
Correct Answer True

True/False
Question An employee employed through contractors on building
operations is entitled to bonus.
Correct Answer False

Multiple Choice Single Answer
Question Proxy form should be deposited with the company :-
Correct Answer 48 hours before the meeting

Multiple Choice Multiple Answer
Question Who has not prescribed particular set of documentation for
current account remittances?
Correct Answer RBI , Central Govt.

Question Sweeping powers such as search and arrest contained in
Foreign Exchange ________ Act.
Correct Answer Control

True/False
Question Wages include any house accommodation, supply of light
medical attendance etc.
Correct Answer False

Multiple Choice Multiple Answer
Question What does an industrial or other establishment means as per
section 2II?
Correct Answer Tramway service or motor transport service engaged carrying
passengers of hire or reward , Dock wharf jetty , Plantation

Multiple Choice Multiple Answer
Question The board of directors shall exercise these powers only at
board meetings :-
Correct Answer Power to issue debentures , Power to borrow money , Power
to make calls on shares

Multiple Choice Single Answer
Question The director after his appointment, has to give consent in
writing to act as director in :-
Correct Answer Form no 29

Select The Blank
Question The management should clearly disclose ________ in
auditors report
Correct Answer Contingent liabilities

Multiple Choice Multiple Answer
Question Current Account transactions include :-
Correct Answer Payments for foreign Trade , Payments for Interest , Foreign
Travel Expenses

Match The Following
Question- Correct Answer
Interim Dividend -Board of Directors

Shorter notice for AGM- Private Limited Company

Books of Account -Form 23AA

Accounting Standards- National Advisory Committee
Multiple Choice Multiple Answer
Question Indian IT. companies are allowed to acquire shares in foreign
companies on following conditions :-
Correct Answer Investment limit of US $ 100 Million , Investment 10 times the
export earnings

True/False
Question Companies listed on recognized stock exchange are not
allowed to invest in foreign companies.
Correct Answer False

Multiple Choice Single Answer
Question Number of shareholders entitled to requisition a meeting shall
be carrying
Correct Answer Not less than 10 per cent of voting power

Select The Blank
Question As per section 5 in case of railways if the persons employed is
less than ________ the wages shall be paid before the expiry
of 7th day.
Correct Answer 1000

Select The Blank
Question The detention period where the amount of penalty is greater
than 10 million is ________.
Correct Answer 3 years

Multiple Choice Multiple Answer
Question Following have the right to inspect books of account :-
Correct Answer Any Director of the company , Officer of SEBI (if authorised) ,
Authorised officer of Government

True/False
Question Employee includes an out worker to whom any article or
material are given out by another person for repair or
cleaning.
Correct Answer True

Select The Blank
Question Free selling/drawl of foreign exchange to authorized
dealer(AD) for ________.
Correct Answer Current account

Multiple Choice Single Answer
Question Whenever the Loan taken from bank or financial institution is
repaid in full, the company has to file Form no 17 &13 within :-
Correct Answer 30 Days

True/False
Question The loan to any body corporate shall be made at the rate of
interest not less than that prevailing bank rate as may be
prescribed by Reserve Bank of India.
Correct Answer True

Multiple Choice Multiple Answer
Question What are the general provisions for punishment of other
offences?Correct Answer Section 22 provides for the provision , Punishable with fine ,
Rs 500 fine