Question 1

Past members do not have to contribute money for a company's debts which occurred after they ceased to be members.

Accepted Answer

A) True 
 B)False

Question 2

The court is only able to make an order for a company to be wound up if the company is insolvent.

Accepted Answer

A) True 
 B)False

Question 3

A declaration of solvency is required to be signed by the directors of the company in order for:

Accepted Answer

A)  the company to issue more shares to its shareholders. 
B)  the liquidation to proceed as a members' voluntary winding up. 
C)  the court to make an order for liquidation. 
D)  the company to borrow more money from a bank. 
A)  the company to issue more shares to its shareholders. 
B)  the liquidation to proceed as a members' voluntary winding up. 
C)  the court to make an order for liquidation. 
D)  the company to borrow more money from a bank.

Question 4

Which of the following is not a way in which a receivership can end?

Accepted Answer

A)  The receiver can resign. 
B)  The receivership can progress to liquidation and the receiver can be appointed as liquidator. 
C)  A voluntary administrator can be appointed to take over from the receiver. 
D)  The receivership can progress to liquidation and a separate party can be appointed as liquidator. 
A)  The receiver can resign. 
B)  The receivership can progress to liquidation and the receiver can be appointed as liquidator. 
C)  A voluntary administrator can be appointed to take over from the receiver. 
D)  The receivership can progress to liquidation and a separate party can be appointed as liquidator.

Question 5

Which of the following is an example of a deferred creditor?

Accepted Answer

A)  Liquidator's remuneration 
B)  Arrears of preference dividends 
C)  Trade creditors 
D)  Audit fees payable 
A)  Liquidator's remuneration 
B)  Arrears of preference dividends 
C)  Trade creditors 
D)  Audit fees payable

Question 6

Which of the following is not one of the main accounts used for liquidation?

Accepted Answer

A)  Liquidator's distribution 
B)  Liquidator's cash 
C)  Shareholders' distribution 
D)  Liquidation 
A)  Liquidator's distribution 
B)  Liquidator's cash 
C)  Shareholders' distribution 
D)  Liquidation

Question 7

In the case of a company being wound up by the court, the liquidator may carry on the business of the company so far as is necessary for its beneficial disposal or winding up.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is entitled to make an application to the court for an insolvent company to be wound up?

Accepted Answer

A)  A court appointed receiver 
B)  Employees of the company 
C)  ASIC 
D)  The company's external auditor 
A)  A court appointed receiver 
B)  Employees of the company 
C)  ASIC 
D)  The company's external auditor

Question 9

Which of the following is the journal entry recorded on realisation of the assets by the liquidator?

Accepted Answer

A)  DR Cash, CR Liquidation 
B)  DR Liquidation, CR Cash 
C)  DR Cash, CR Revenue from sale of assets 
D)  DR Shareholders' distribution, CR Cash 
A)  DR Cash, CR Liquidation 
B)  DR Liquidation, CR Cash 
C)  DR Cash, CR Revenue from sale of assets 
D)  DR Shareholders' distribution, CR Cash

Question 10

In the case of a member's voluntary winding up, the directors of the company are required to prepare both a statement of affairs and a declaration of solvency.

Accepted Answer

A) True 
 B)False

Past members do not have to contribute money for a company's debts which occurred after they ceased to be members.

The court is only able to make an order for a company to be wound up if the company is insolvent.

A declaration of solvency is required to be signed by the directors of the company in order for:

Which of the following is not a way in which a receivership can end?

Which of the following is an example of a deferred creditor?

Which of the following is not one of the main accounts used for liquidation?

In the case of a company being wound up by the court, the liquidator may carry on the business of the company so far as is necessary for its beneficial disposal or winding up.

Which of the following is entitled to make an application to the court for an insolvent company to be wound up?

Which of the following is the journal entry recorded on realisation of the assets by the liquidator?

In the case of a member's voluntary winding up, the directors of the company are required to prepare both a statement of affairs and a declaration of solvency.

Nature and Regulation of Companies

Financing Company Operations

Business Combinations

Disclosure: Legal Requirements and Accounting Polices

Disclosure: Presentation of Financial Statements

Disclosure: Statement of Cash Flows

Foreign Currency Transactions and Forward Exchange Contracts

Translation of Financial Statements Into a Presentation Currency

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Joint Arrangements

Accounting for Company Income Tax

Property, Plant Equipment

Filters

Exam 16: Insolvency and Liquidation

Past members do not have to contribute money for a company's debts which occurred after they ceased to be members.

The court is only able to make an order for a company to be wound up if the company is insolvent.

A declaration of solvency is required to be signed by the directors of the company in order for:

Which of the following is not a way in which a receivership can end?

Which of the following is an example of a deferred creditor?

Which of the following is not one of the main accounts used for liquidation?

In the case of a company being wound up by the court, the liquidator may carry on the business of the company so far as is necessary for its beneficial disposal or winding up.

Which of the following is entitled to make an application to the court for an insolvent company to be wound up?

Which of the following is the journal entry recorded on realisation of the assets by the liquidator?

In the case of a member's voluntary winding up, the directors of the company are required to prepare both a statement of affairs and a declaration of solvency.

Nature and Regulation of Companies

Financing Company Operations

Business Combinations

Disclosure: Legal Requirements and Accounting Polices

Disclosure: Presentation of Financial Statements

Disclosure: Statement of Cash Flows

Foreign Currency Transactions and Forward Exchange Contracts

Translation of Financial Statements Into a Presentation Currency

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Joint Arrangements

Accounting for Company Income Tax

Property, Plant Equipment

Filters