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Corporate Accounting [Important Questions & Answers with MCQ]


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Accounting can be a difficult subject for students because it’s not always easy to understand. This is why it’s important for teachers to make the subject approachable for learners. The best way to do this is to teach students how to answer key questions in a way that make sense. This blog will look at some of the important questions that the students should be able to answer regarding corporate accounting.

Corporate Accounting Important Questions & Answers

Corporate Accounting MCQs

Check your Knowlege of Corporate Accounting with very imprtant MCQs

Q1: What do you mean by Contingent liabilities?

Ans: Contingent liabilities are one of the most complicated parts of business law. Contingent liability is a type of liability that is unknown or unquantifiable at the time at which the company is on the brink of bankruptcy. In other words, it’s a liability that’s not known because it hasn’t been encountered yet.

For example, a manufacturer may have a contingent liability in the form of a manufacturing defect that’s been discovered in the product, but the company is unable to determine when the defect will be discovered. This is a liability that’s not quantifiable at the time the company is falling on hard times and is dependent on the outcome of a future event.

Q2: What is meant by Non-divisible profits?

Ans: A non-divisible profit is a profit that cannot be broken down into smaller profit shares. If a company has a non-divisible profit in its profits, it is because it has no other business segment to divide it. This can happen if an organization is a subsidiary of a larger company. The larger company is not required to divide the profit and pay out dividends if it is a non-divisible profit.

Q3: Give the meaning of Acquisition?

Ans: Acquisition is a term used to describe the process of acquiring or taking over a business, especially if it is done by buying it. . Acquisitions include mergers, acquisitions, and investments. There are a variety of ways that companies can complete an acquisition.

For example, companies can purchase a company, buy all the shares of a company, or receive a company as a takeover.

Q4: Give the meaning of Environmental Accounting?

Ans: Environmental Accounting is a growing discipline that provides a framework for measuring the environmental impacts of business activities. It is becoming increasingly important as companies and policy-makers try to address the risks associated with climate change and natural resource scarcity.

Environmental Accounting is different from traditional accounting in that it uses a system of exchange and a framework of decision rights to analyze the impacts of business activities on natural resources. It analyzes the trade-offs between the use of natural resources and their value, thereby revealing the opportunity cost of natural resource use.

Q5: Who is a liquidator?

Ans: A liquidator is someone who purchases the assets or assets of a company at a price below the asset’s value and then sells them at a profit to a company that is not in liquidation. Liquidators often sell an asset to a company at a price that is less than the value of the asset. The liquidator is often an independent company or an investor who buys the assets of the company that is going through liquidation.

Q6: What is Capital reduction A/c?

Ans: Capital reduction is an accounting process that a business can use to reduce its future taxes. It works by recognizing losses from one year to another. This can be done by selling off property or through a process called amortization.

By issuing a capital reduction A/c, the company can reduce their debt-to-equity ratio, which has a positive impact on the company’s overall credit profile.

Q7: What is social accounting?

Ans: Social accounting is a new type of accounting that is focused on measuring the impact of social investments and social accountability. Social accounting has many applications in areas such as health care, education, corporate social responsibility, and nonprofit organizations.

Social accounting is a method of accounting in which the information is publicly shared. This allows for all employees to have a shared understanding of the company’s financial performance.

Q8: What is minority interest?

Ans: A minority interest is an interest in something that is executed by a minority of the overall interest. Minority interest is a situation where a company’s total interest in a company exceeds its share of the equity.

This is the type of interest that occurs when the current shareholders own less than 50% of the company. Minority interest is typically a major reason for an initial public offering. Minority interest can also occur in a company’s financing structure, where a company receives a loan from a bank and the bank has a minority interest in the company.

Q9: Who are contributories?

Ans: A contributory is someone who has made a contribution to the company’s assets.

There are two types of contributories, employees and independent contractors. Employees are employed by the business and are entitled to be paid a salary. Independent contractors are not employees and are paid for services rendered.

Those who are not employees or independent contractors are treated as shareholders in the company. They are entitled to a share of the company’s profits when the company is profitable. This is determined by the company’s net profit.

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Q10: What is intangible asset?

Ans: An intangible asset is an asset that is not tangible. This means it cannot be seen or touched. Intangible assets are not limited to just intellectual property. This can include a brand or patent. This can also include information or data that is not tangible.

The most common example of an intangible asset is goodwill. Other examples of intangible assets are patents, trademarks, and copyrights.

Q11: What is goodwill?

Ans: Goodwill is a financial accounting concept that measures the difference between the book value of a business and the value of its net assets. The goodwill is useful report that provides information about the company’s fiscal position and financial performance.

Goodwill is a financial asset that has a positive impact on the company’s financial position. When a company buys another company, the amount of goodwill that is conveyed can be used to offset the acquired company’s liabilities. Goodwill is calculated by subtracting the value of the company being bought from the cost of the acquisition.

For example, goodwill will arise when a corporation acquires another corporation. From that acquisition, the newly acquired corporation may represent a significant market position.

Q12: Explain Indian Standard Accounting?

Ans: Indian Standard Accounting is the accounting method that is used in India. Indian Standard Accounting uses the BIFR method to calculate the cost of goods sold. Since Indian Standard Accounting is a paper-based accounting system, it is important that a company is able to have a clear understanding of what is going on in their accounts. To help a company understand their accounts, it is crucial that they have a good understanding of how Indian Standard Accounting works.

The Indian Accounting Standards are based on the guidelines of the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.

Indian Standard Accounting is a comprehensive system that is used to help prepare financial statements. This system includes accounting for all assets, liabilities, income, and expenses. It is used for the preparation of financial statements for all types of entities, including corporations, partnership, limited liability companies, and government units.

Q13: What is Banking?

Ans: Banking is a system of institutions that provide financial services to individuals. Banks provide a means of storing and making transactions with the use of financial instruments, such as deposits, loans, or investments. In exchange for the use of the facilities and services provided, banks receive payment, typically in the form of interest on the deposited funds.

There are a lot of different types of people who work in this industry. Some of the most common types of people who work in the financial industry are lawyers, economists, accountants and financial advisors.

Q14: What is the difference between General insurance and Life insurance?

Ans: General insurance is typically the type of insurance that covers any number of unrelated risks. This includes things like automobile and home insurance, fire insurance, and health insurance.

Life insurance is typically the type of insurance that covers the risks associated with death, such as death from a car accident, cancer, or heart disease.

General insurance is typically cheaper than Life insurance.

Q15: Define Reserve capital?

Ans: A reserve capital is a supplemental savings account for money that can be used for emergencies, such as replacing a car, eliminating a debt, or paying for a loved one’s care. A reserve capital is a financial safety net that provides a way to plan for future expenses without fear of incurring debt. To create a reserve capital, a person can set aside a small amount of money each time they make a purchase, automatically transferring the money from their account to a savings account. This can be done through a savings account, such as a bank account or an FDIC-insured savings account, or through a credit card. This capital can then be used to manage unexpected expenses.

Q16: What is a Right issue in corporate accounting?

Ans: A right issue is where a corporation has a legal obligation to make a payment or return a benefit to an individual or entity. The right issues are typically related to the company’s core business.

For example, a company may have a right issue related to the purchase of materials. This would be a right issue because if a company were to breach the contract it would be required to pay the purchase price to the supplier.

A right issue usually becomes an issue when a transaction cannot be completed or when information is not being provided as intended. In order to avoid right issues, companies should check their policies and procedures to ensure that they are up-to-date and correct.

Q17: What do you mean by Consolidated Balance sheet?

Ans: A consolidated balance sheet encompasses the assets, liabilities, owners’ equity and net worth of a business enterprise, or the overall financial position of a company or an individual. It presents the financial position of a single entity or the combined financial position of two or more entities.

A consolidated balance sheet can be used to prepare a financial statement that presents consolidated financial information. If a company or individual has a single owner, the consolidated balance sheet will show only one owner.

Q18: What do you mean by Contribution?

Ans: Contribution is the revenue that is generated from a company’s sales. It is usually calculated by subtracting cost of goods sold from net sales. It is the part of the income statement that is used to show the net profit or loss of the company. It is calculated before taxes and any other deductions are made.

Q19: What is Internal construction?

Ans: Internal construction is a significant part of the process of creating and maintaining a company’s financial statements. It is a process of creating and maintaining the company’s inventory. The inventory is then used to prepare a company’s balance sheet and income statement by taking in costs of goods sold and expenses. The inventory is also used to prepare a company’s analysis of changes in stockholders’ equity, which is the difference between the assets of the company and the liabilities of the company.

Q20: What do you mean by a “Banking company”?

Ans: A banking company is a company that provides banking services, which is the exchange of cash, credit and financial management. Banks are also involved in banking transactions, which are the transfer of funds from one party to another.

Q21: What are the kinds of Insurance?

Ans: There are different types of insurance, including health, life, property, and auto.

Life insurance is a form of insurance that has been around for a long time. It’s typically purchased to provide financial assistance in the event of the death of the insured.

Health insurance is a type of insurance that covers medical expenses that a person may incur. It’s typically purchased to ensure that people are covered in case they become sick or injured.

Property insurance covers the building, house, or similar property that you own. It pays out in case of a natural disaster, fire, or theft. If you want to be prepared in case of an emergency, you can always buy insurance to cover your car.

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Auto insurance covers the cost of damage to or theft of a car.

Q22: What is Amalgamation?

Ans: Amalgamation is the process of combining two or more corporations into one corporation. This can take place through a merger, acquisition, or spin-off. Amalgamation is a strategy employed by many companies to maximize efficiency and profitability. Amalgamations can be complex and difficult to manage, and often involve stakeholders, labor unions, government agencies, and shareholders. It is important for companies to consider the key factors for success when planning their amalgamation. These include: the type of relationship between the companies, the market that each company wants to be in, the amount of acquisition, the anticipated product life of the new corporation, and the cost of the amalgamation.

Q23: Define Holding company and Subsidiary company?

Ans: A holding company is a company that owns other companies. Its primary business is to consolidate a strong control over an enterprise and to manage the various affairs of the subsidiary companies by overseeing their operations and by making investments in these companies. The ownership structure of a holding company is typically controlled by a single individual or a small group of individuals, usually a CEO or a board of directors. The shareholders of a holding company are the owners of the company’s shares.

A subsidiary company is a company that is owned by a holding company and which is controlled by the holding company. Subsidiary companies are typically engaged in the same business as the holding company, but are not directly owned by the holding company.

Q24: What are the characteristics of “Debenture”?

Ans: “Debenture” is a product that is often found in a bond market. It is a debt instrument from a company that will be repaid in installments over time. The company issuing the “Debenture” is either seeking to raise capital or is trying to reduce its existing debt. When an investor buys “Debenture,” he or she is buying a share of the company’s future earning potential and is taking a risk.

Q25: Distinguish between Manager and Managing director?

Ans: Managing director is a title given to the head of a company and holds the highest position of power in the company. The managing director of a company will typically be the person who is in charge of the day-to-day activities of the company and is responsible for hiring, firing, and maintaining the company’s relationships with employees.

A manager is a person who leads an individual or team of people in a specific job or task. Managers will typically have a lot of autonomy and are given a lot of discretion as to what they can do in the job they are assigned.

Q26: What is a contract?

Ans: A contract is an agreement between two parties that has been made in writing and signed by both parties. Contracts exist for a number of reasons. One of the most common reasons for a contract is to gain the consent of a third party to enter into an agreement. Contracts are also used to control the rights and obligations of the parties involved. This includes, but is not limited to, a contract for the purchase of a house or a car, or an employment contract. These contracts are often used to ensure that the parties involved are meeting their obligations.

Q27: Who is an agent?

Ans: The term agent refers to a person who acts on behalf of a company, or a person who has the authority to act on behalf of the company. Agents typically work with the company’s financial accounting department and collect receivables from customers. They are not employees of the business and are not involved in any business decision-making processes.

An agent can work inside the company or outside the company. An agent can be a person, a business, or any type of entity that is employed by a company to collect payments or sell the company’s goods or services.

Q28: What is a Void agreement?

Ans: A Void agreement is a type of contract used to terminate a contract because the agreement is void. The agreement is considered void because it either does not contain all of the necessary terms to make it legally binding, or because one of the parties can prove that it was induced through fraud. The term is used in contract law and is generally applied to situations where one party has broken the contract.

Q29: What is Proposal?

Ans: Proposal is the process of requesting a change to a company policy, budget, or other important document. The process of submitting a proposal starts with a business case that explains the need for the change and why it will be successful. In addition, the case will usually include a timeline, a budget and the relevant data. Once the proposal is accepted, the project will progress to the next stage, which is the development of a plan. The plan will be designed to meet the goals and objectives that have been set. Once the plan is approved, it will be implemented.

Q30: What is SEBI and it’s function?

Ans: The Securities and Exchange Board of India (SEBI) is the regulatory body of the Indian capital markets. It is an autonomous organization that regulates various aspects of the securities and capital markets in India. It was formed by a statute enacted in 1992, under which it was created out of the erstwhile Indian Stock Exchange.

The SEBI is responsible for the regulation of securities, commodity futures and options, derivatives, mutual funds, collective investment schemes, pension funds, and all matters related to the securities market in India.

Q31: What is IDRA?

Ans: The (IDRA) Industries Development and Regulation Act of India is a law that was passed by the Indian Parliament in 1952. It is related to the development of industries in India and the regulation of the same. This act is different from the other legislation that was passed by the Parliament. The Act is aimed at promoting competitiveness in the manufacturing sector and increasing investment in the sector. The Act also aims to increase transparency and accountability in the sector. This act is applicable to all industries, including manufacturing, shipping, construction and services.

Q32: What do you mean by Corporate governance?

Ans: Corporate governance refers to the process that a company goes through to ensure that it is operating in accordance with the law and with the company’s purpose. The process can vary depending on the company, but typically includes the monitoring of the company’s internal processes, the monitoring of the company’s external relationships, and the monitoring of the company’s finances.

Corporate governance encompasses the actions taken by a company to maximize the value of its assets and to manage the risks and rewards of operations, such as the budgeting, planning, monitoring, evaluating, interpreting, and reporting of the performance of a company.

Q33: What is Costing?

Ans: Costing is the process of measuring, accumulating, and allocating costs to products or services provided to a customer, or the process of identifying, estimating and allocating inputs used or consumed in the production of goods or services and the subsequent allocation of the cost of these inputs to the items produced.

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The cost of a product can be broken down into its direct cost, which is the cost of materials, and the indirect cost, which is the cost of wages and utilities. Costing is also done for a variety of other reasons, such as understanding how much a particular type of product or service costs to produce. It is important to have a system in place for costing in a corporate environment, as you may be audited.

Q34: What are the objectives of Cost Accounting?

Ans: Cost accounting is the process of differentiating the cost of a product or service from the revenue it generates. The process is not limited to just the cost of the product or service itself. It also includes the cost of materials, manufacturing, labor, overhead, and other expenses that must be incurred in order to produce the product.

The primary objective of cost accounting is to provide useful information for managerial decision-making. This includes the determination of the cost of a product or service and the cost of raw materials, manufacturing, overhead, and selling and administrative expenses.

Q35: What are the elements of cost?

When considering the cost of a project, there are a number of things that you need to consider. There are several ways to determine the cost of a project, but to simplify the process, there are a few key components to consider.

  • The first is the cost of labor. It is the cost of hiring employees, contractors or freelancers, as well as the cost of their time in your project.
  • The second is the cost of materials. This is the cost of the materials that you need to use for your project. This can include the cost of the materials, as well as the shipping and handling.
  • The third is the cost of time. This is the cost of the time that goes into the project. This includes the amount of time that you, the project’s manager, have to spend on the project, as well as the time that the employees or contractors have to spend.
  • The fourth is the cost of equipment. This is the cost of the equipment that you need to use for your project.

Q36: What is overtime?

Ans: Overtime is the number of hours worked in excess of a normal work shift. It is calculated as the total number of hours worked in a week or over a period of a year divided by the number of days worked in the same period.

For example, if a person works a 48-hour work week but they work an additional 8 hours of overtime, they will work 72 hours in a week and their overtime will be 12 hours.

The overtime rules are not the same for every company. There are also regulations for employees who work for a unionized company.

Q37: What is Reconciliation statement?

Ans: A reconciliation statement is a summary of all the transactions, revenue, and expenses that occurred during a certain time period. The reconciliation statement is used to compare the beginning balance in the accounting records to the ending balance in the accounting records.

When it comes to reconciling your account, there are two types: One is called physical, where you physically compare transactions with each other. The other is called electronic, where you use an account reconciliation to make sure that all transactions are recorded properly and accurately. The bank will provide you with a reconciliation statement each month that shows you all of the transactions that were made in the past month, so that you can compare them.

Q38: What is a purchase requisition?

Ans: A purchase requisition is a document that is used to prepare an order for purchase of materials, equipment or services. It is issued by a purchasing agent and is a legal document. The purchase requisition is used to provide information to the supplier on quantity, delivery date, payment terms and other terms and pricing. It is usually used to fix the terms and pricing for a single purchase or for a group of related purchase orders.

Q39: Define the term material control

Ans: Material control is a procedure used to track costs, materials, and inventory within a company. It is a good idea to have a material control system in place because the system helps in keeping track of the volume of materials and inventory that is used. It is a good idea to have a material control system in place because the system helps in tracking the volume of materials and inventory used.

Q40: What is Open market operation?

Ans: Open market operation is a form of capital market in which the issuer sells a security to a group of investors at the same time. The securities are offered by the issuer to a group of investors through the offer and sale of a block of securities, rather than the sale of a security to a single investor. The securities are then traded on a securities market.

FAQs on Corporate Accounting:

What is Corporate Accounting?

Corporate accounting is the process of recording and reporting financial transactions for a corporation. This includes financial statements such as the balance sheet, income statement, and cash flow statement, as well as other financial reports and disclosures required by law.

What are the main principles of Corporate Accounting?

The main principles of corporate accounting include the accrual basis of accounting, consistency, and materiality. The accrual basis of accounting states that financial transactions should be recorded when they occur, not just when cash is exchanged. Consistency means that a company should use the same accounting methods from year to year. Materiality means that only transactions that are significant enough to affect a company’s financial statements should be recorded.

What are the main financial statements in Corporate Accounting?

The main financial statements in corporate accounting are the balance sheet, income statement, and cash flow statement. The balance sheet shows a company’s financial position at a specific point in time, including its assets, liabilities, and shareholders’ equity. The income statement shows a company’s revenues and expenses over a specific period of time, resulting in the net income or loss. The cash flow statement shows the inflow and outflow of cash for a specific period of time.

How do Corporate Accounting practices differ from personal accounting practices?

Corporate accounting practices differ from personal accounting practices in terms of the scope and complexity of financial transactions. Corporate accounting deals with a large number of transactions, a wide range of stakeholders, and a variety of legal and regulatory requirements. It also requires the use of specialized accounting software and the involvement of a team of professionals, such as accountants, auditors, and financial analysts.
Personal accounting, on the other hand, is typically simpler, with fewer transactions and stakeholders, and may involve the use of basic accounting software or spreadsheet programs.

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