Declaration and Payment of Dividend – CA Inter Law MCQ is designed strictly as per the latest syllabus and exam pattern.
Declaration and Payment of Dividend – CA Inter Law MCQ
Question 1.
XP Ltd declared 12% dividend to its Equity Shareholders. However Company missed to transfer unpaid dividend to bank account even after 40 days from declaration of Dividend. In such case how much interest will be payable?
(a) 8% p.a.
(b) 16% p.a.
(c) 10% p.a.
(d) 12% p.a.
Answer:
(d) 12% p.a.
Question 2.
Mr. X is a shareholder of Mark Pvt. Ltd. He transferred his shares to his daughter Ms. D, in the month of February. Registration of such instrument of transfer is still pending by the Company. In this scenario, Companies Act, 2013 state certain provisions which have to be kept in mind by the Company. Which provision mentioned below in this regard is correct?
(a) Company has to transfer the dividend in relation to such shares to the Unpaid Dividend Account.
(b) Company has to transfer the dividend in relation to such shares in the name of transferee.
(c) Company has to issue fully paid-up bonus shares in the name of transferor.
(d) Company has to issue fully paid-up bonus shares in the name of transferee.
Answer:
(a) Company has to transfer the dividend in relation to such shares to the Unpaid Dividend Account.
Question 3.
Which of the following amount is not credited to IEPF Account?
(a) Amount in unpaid dividend account (UDA) of company.
(b) Amount of matured deposits with the company.
(c) Profit on sale of assets.
(d) Amount of matured debentures with the company.
Answer:
(c) Profit on sale of assets.
Question 4.
The authorised and paid-up share capital of Avantika Ayurvedic Products Limited is ₹ 50 lakhs divided into 5,00,000 equity shares of ₹ 10 each. At its Annual General Meeting (AGM) heid on 24th September, 2022, the company declared a dividend of ₹ 2 per share by passing an ordinary resolution. Mention the latest date by which the amount of dividend must be deposited in a separate account maintained with a scheduled bank.
(a) Latest by 29th September, 2022.
(b) Latest by 4th October, 2022.
(c) Latest by 9th October, 2022.
(d) Latest by 24th October, 2022.
Answer:
(a) Latest by 29th September, 2022.
Question 5.
The Directors of Silver Tongue Solutions Limited proposed dividend at 18% on equity shares for the financial year 2021-22. The same was approved in the Annual general body meeting held on 30th September, 2022. The Directors declared the approved dividends.
Mr. Jagan was the holder of 2,000 equity of shares on 31st March, 2022, but he transferred the shares to Mr. Rajiv on 8th August, 2022. Mr. Rajiv has sent the shares together with the instrument of transfer to the company for registration of the shares in his favour only on 25th September, 2022. The registration of the transfer of shares is pending on 30th September, 2022. With respect to the dividend declared the correct action to be taken by the company is:
(a) Pay the dividend to Mr. Jagan.
(b) Pay the dividend to Mr. Rajiv.
(c) Transfer the dividend in relation to such shares to the Unpaid Dividend Account.
(d) Transfer the dividend in relation to such shares to the Investor Education and Protection Fund.
Answer:
(c) Transfer the dividend in relation to such shares to the Unpaid Dividend Account.
Questions from RTPs, MTPs And Past Exams (Memory Based) of ICAI
Question 6.
In how many days from the date of declaration of interim dividend, it shall be deposited in a separate bank account. [MTP-April 19]
(a) 5 days
(b) 7 days
(c) 15 days
(d) 21 days
Answer:
(a) 5 days
Question 7.
After Declaration of dividend it should be paid within. [MTP-April 19]
(a) 14 days
(b) 21 days
(c) 30 days
(d) 45 days
Answer:
(c) 30 days
Question 8.
ABC Ltd., a listed company proposed a dividend @ 15% on equity shares for the financial year ended on 31st March, 2022. The Annual General Meeting (AGM) of the company was held on 15th July, 2021 and the proposed dividend was approved and declared in the same. Due to some technical issues, dividend on 600 shares neither be paid within the time limit prescribed by the Act nor was transferred to unpaid dividend account. In such a situation which regulatory authority can take action against the company and its officers in default? [MTP-April ]
(a) Central Government
(b) SEBI
(c) Tribunal
(d) Investor Education and Protection Fund Authority.
Answer:
(b) SEBI
Question 9.
Sumitra Healthcare and Hospitality Limited had issued 9% non-convertible debentures which matured four years back. However, 1,000 such debentures of ₹ 100 each are still remaining unclaimed and unpaid even after the maturity. State the period after which the company needs to transfer them to Investor Education and Protection Fund (IEPF) if they remain unclaimed and unpaid. [MTP-Oct. 19, RTP-Nov. 19]
(a) After the expiry of 5 years from the maturity date.
(b) After the expiry of 6 years from the maturity date.
(c) After the expiry of 7 years from the maturity date.
(d) After the expiry of 8 years from the maturity date.
Answer:
(c) After the expiry of 7 years from the maturity date.
Question 10.
Shreyas Mechanics Limited owns a plot of land which was purchased long before. As the property rates are going up, it is decided to revalue the plot at fair value which is moderately ten times the original price, thus resulting in a revaluation profit of ₹ 20 lakhs. The Board of Directors is keen to utilize ₹ 20 lakhs along with free reserves of ₹ 24 lakhs for declaration of dividend at the forthcoming Annual General Meeting (AGM) to be held on 28th September, 2022. Advise Hie company. [RTP-Nov. 20]
(a) ₹ 20,00,000 are to be excluded from the distributable profits as the same cannot be utilized towards declaration of dividend.
(b) Only 25% of ₹ 20,00,000 can be utilized as distributable profits towards declaration of dividend.
(c) Up to 50% of ₹ 20,00,000 can be utilized as distributable profits towards declaration of dividend.
(d) Up to 60% of ₹ 20,00,000 can be utilized as distributable profits towards declaration of dividend.
Answer:
(a) ₹ 20,00,000 are to be excluded from the distributable profits as the same cannot be utilized towards declaration of dividend.
Question 11.
The Board of Directors of Vidyut Limited are contemplating to declare interim dividend in the last week of July, 2022 but the company has incurred loss during the current financial year up to Hie end of June, 2022. However, it is noted that during the previous five financial years i.e., 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22, the company had declared dividend at the rate of 8%, 9%, 12%, 11% and 10% respectively. Advise the Board as to the maximum rate at which they can declare interim dividend despite incurring loss during the current financial year. [MTP-Oct. 21]
(a) Maximum at the rate of 10%.
(b) Maximum at the rate of 11%.
(c) Maximum at the rate of 10.5%.
(d) Maximum at the rate of 11.5%.
Answer:
(b) Maximum at the rate of 11%.
Question 12.
Amount to be transferred to reserves out of profits before any declaration of dividend is ________. [MITP-Oct 21, April 22]
(a) 5%
(b) 7.5%
(c) 10%
(d) at the discretion of the company.
Answer:
(d) at the discretion of the company.
Question 13.
Mr. Guru bought 40,000 shares of Real Consultancy Services (RCS) of face value 10 each out of his savings. On such shares, the final call of ₹ 2 is due but unpaid by Mr. Guru. In the meantime, RCS declared dividend at a rate of 15%. Regarding unpaid call money by Mr. Guru, in light of dividend due to him from RCS, state which of the following statement is correct? [MTP-Nov.21]
(a) Dividend cannot be adjusted against the unpaid call money.
(b) The dividend of ₹ 48,000 can be adjusted against unpaid call money.
(c) The dividend of ₹ 48,000 can be adjusted against unpaid call money, only if consent is given by Mr. Guru.
(d) The dividend of ₹ 64,000 can be adjusted against unpaid call money, even if consent is not given by Mr. Guru.
Answer:
(b) The dividend of ₹ 48,000 can be adjusted against unpaid call money.
Question 14.
When the dividend is declared at the Annual General Meeting of the company, it is known as . [MTP-Nov. 21]
(a) Final Dividend
(b) Interim Dividend
(c) Dividend on preference shares
(d) Scrip Dividend
Answer:
(a) Final Dividend