MCQ on Buy back of Shares : multiple choice questions and answer

Buy Back of Shares Multiple Choice Questions (MCQ)

Corporate Accounts MCQs
for B.Com/CA/CS/CMA Exam

1. As per section 77A (1) of the companies act,1956, a company can buy back its own shares out of:
a.       Reserves which are available for distribution as dividend
b.      Securities premium accout
c.       Proceeds of fress issue of shares or other specified securities
d.      All of the above.

2. Buy back of shares is allowed out of fress issue of shares of the same kind.                                                     False

3. Which of the following statement is false:
a.       Buy back must be authorised by articles of company
b.      A special resolution must be passed for buy back.
c.       Shares can be partly paid up
d.      The ratio of debt owed by the company is not more than twice the capital and its free reserves after such buy back.

4. Maximum buy back limit in any year is ______ of total paid up equity capital and free reserves.
a.      25%
b.      10%
c.       20%
d.      No limit

5. Maximum one buy back is allowed in a period of 365 days.                                      True

13. Premium payable on buy back is adjusted out of:
a.       Securities premium account
b.      Free reserves
c.       Both of the above
d.      None of the above

14. For cancellation of shares at the time of buy back:
a.       Equity share capital a/c is debited and share holders account is credited
b.      Shareholders account is debited and Equity share capital account is credited
c.       Equity share capital is debited and CRR is credited
d.      Equity share capital is debited and Shares Surrendered is credited