Acct2542 Essay

4013 Words Feb 10th, 2016 17 Pages
Testbank

to accompany

Company Accounting 10e

by
Ken Leo, Jeffrey Knapp, Sue McGowan & John Sweeting

Prepared by

Peter Baxter

[pic]

© John Wiley & Sons Australia, Ltd 2015

Chapter 1: Nature and regulation of companies

Multiple-choice questions

1. The advantages of a company over a partnership and sole trader do not include which of the following?

a. Members are able to sell their shares at any time to another person without having to obtain permission from the other members. b. Members are liable for only a limited amount of the company’s debts. c. A company has a legal existence distinct from its owners. *d. A company is only entitled to raise small amounts of cash by issuing
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c. Remuneration of the external auditors. d. Annual dividend payments to members.

Correct answer: a
Learning Objective 1.3 ~ describe the necessary documentation for forming a company

9. The replaceable rules that apply to a company have effect as a contract between:

a. the company and each member. b. the company and each director and company secretary. c. a member and each other member. *d. all of the above.

Correct answer: d
Learning Objective 1.3 ~ describe the necessary documentation for forming a company

10. The share capital of a company may consist of:

*a. ordinary or preference shares issued by the company either fully paid or partly paid. b. loans from banks. c. secured and unsecured notes issued by the company. d. debentures issued by the company.

Correct answer: a
Learning Objective 1.5 ~ compare and contrast shares and debentures, and discuss the reasons for issuing disclosure documents

11. The main role of the trustee for debenture holders is to protect the interests of:

a. suppliers. *b. debenture holders. c. directors. d. employees.

Correct answer: b
Learning Objective 1.5 ~ compare and contrast shares and debentures, and discuss the reasons for issuing disclosure documents

12. Which of the following is not specifically excluded from the definition of a debenture under s. 9 of the Corporations Act 2001?

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