{"id":7218,"date":"2021-10-02T11:42:01","date_gmt":"2021-10-02T06:12:01","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=7218"},"modified":"2025-10-08T13:30:35","modified_gmt":"2025-10-08T08:00:35","slug":"buy-back-of-shares-mcq","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/buy-back-of-shares-mcq\/","title":{"rendered":"Buy Back of Shares MCQ (Free) | Section 68 of Companies Act"},"content":{"rendered":"\n<h2 class=\"wp-block-heading has-text-align-center\"><strong>Buy Back of Shares MCQ<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Buy-Back-of-Shares-mcq-1024x576.jpg\" alt=\"Buy Back of Shares mcq\" class=\"wp-image-7292 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Buy-Back-of-Shares-mcq-1024x576.jpg 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Buy-Back-of-Shares-mcq-300x169.jpg 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Buy-Back-of-Shares-mcq-768x432.jpg 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Buy-Back-of-Shares-mcq-1536x864.jpg 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Buy-Back-of-Shares-mcq-640x360.jpg 640w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/10\/Buy-Back-of-Shares-mcq.jpg 1920w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><figcaption class=\"wp-element-caption\">Buy Back of Shares MCQ<\/figcaption><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/financial-accounting-mcqs\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/financial-accounting-mcqs\/\" target=\"_blank\" rel=\"noreferrer noopener\">MCQs on other topics of Financial Accounting <\/a><\/strong><\/li>\n\n\n\n<li><a href=\"https:\/\/www.icsi.edu\/media\/webmodules\/modelquestionpaper\/CMA-MCQ%20100.pdf\" data-type=\"URL\" data-id=\"https:\/\/www.icsi.edu\/media\/webmodules\/modelquestionpaper\/CMA-MCQ%20100.pdf\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Cost Accounting MCQs pdf <\/strong><\/a><\/li>\n<\/ul>\n\n\n\n<p><strong>1. Buy back of equity shares is permissible to the limit of <strong>_<\/strong>__________ in a year.<\/strong><br>a) 30% <br>b) 25% <br>c) 10% <br>d) 20%<\/p>\n\n\n\n<p><strong>2. Amount payable on buy back cannot exceed 25% of <strong>_<\/strong>____________ .<\/strong><br>a) capital, premium, reserves (shareholders fund)<br>b) Debt<br>c) none of the above<\/p>\n\n\n\n<p><strong>3. For calculation of limit of capital and reserve, the amount as per <strong>_<\/strong>_________ should be considered.<br><\/strong>a) Profit &amp; Loss Account <br>b) latest Balance Sheet<br>c) none of the above<\/p>\n\n\n\n<p><strong>4. The post buy back debt\u2013equity ratio should not exceed <strong>_<\/strong>___________ .<\/strong><br>a) 02:02 <br>b) 01:02 <br>c) 01:01 <br>d) 02:01<\/p>\n\n\n\n<p><strong>5. The buyback must be completed within <strong>_<\/strong>________ months from the date of resolution.<\/strong><br>a) three <br>b) two <br>c) twelve <br>d) six<\/p>\n\n\n\n<p><strong>6. The company should open___________ Account with bank to provide fund for buy back.<br><\/strong>a) fixed deposit <br>b) Saving <br>c) Current <br>d) Escrow<\/p>\n\n\n\n<p><strong>7. Buy back of shares can be of <strong>_____________<\/strong> paid up shares.<\/strong><br>a) fully <br>b) partly <br>c) fully subscribed <br>d) none of the above<\/p>\n\n\n\n<p><strong>8. The company issue <strong>_<\/strong>__________ class of shares which are subject to buy back.<\/strong><br>a) equity share<br>b) preference share <br>c) Both a &amp; b <br>d) none of the above<\/p>\n\n\n\n<p><strong>9. Capital redemption reserve is to be created to the extent of <strong>_<\/strong>__________ .<\/strong><br>a) face value of shares <br>b) Market Value<br>c) none of the above<\/p>\n\n\n\n<p><strong>10. Security premium can be _________<strong>_<\/strong> for calculating limit.<\/strong><br>a) included <br>b) Excluded<br>c) none of the above<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answers:<\/strong> <span class=\"has-inline-color has-vivid-red-color\">1)25%  2)capital, premium, reserves (shareholders fund)  3)latest Balance Sheet  4)02:01  5)twelve  6)Escrow  7)fully  8)equity  9)face value of shares  10)included<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>11. The buy back of shares can be effected by purchase from <strong>_<\/strong>_________ .<\/strong><br>a) open market <br>b) Private<br>c) none of the above<\/p>\n\n\n\n<p><strong>12. The buy back of share is governed by Section ________<strong>_<\/strong> of Companies Act.<\/strong><br>a) 75 <br>b) 78 <br>c) 80 <br>d) 68<\/p>\n\n\n\n<p><strong>13. Buy Back of shares is for <strong>_<\/strong>_______ class of shares.<\/strong><br>a) preference shares <br>b) equity shares<br>c) both a &amp; b <br>d) none of the above<\/p>\n\n\n\n<p><strong>14. Partly paid shares <strong>_<\/strong>________ be bought back.<br><\/strong>a) can not <br>b) can<br>c) none of the above<\/p>\n\n\n\n<p><strong>15. The amount paid in excess of face value of shares bought back should be debited to <strong>__________ <\/strong>.<br><\/strong>a) dividend equalisation reserve <br>b) General Reserve <br>c) revaluation reserve <br>d) premium \/ reserves<\/p>\n\n\n\n<p><strong>16. The buy back of shares upto 10% of capital can be authorized by <strong>_<\/strong>_________ .<br><\/strong>a) directors <br>b) shareholder <br>c) creditors<br>d) none of the above<\/p>\n\n\n\n<p><strong>17. <strong>_<\/strong>_______ can authorize buy back of shares between 10% and 25%.<\/strong><br>a) creditors<br>b) debentureholder<br>c) directors <br>d) Shareholders<\/p>\n\n\n\n<p><strong>18. The shares which are subject to buy back should be physically <strong>_<\/strong>_________ .<\/strong><br>a) re- issued <br>b) ignored <br>c) destroyed <br>d) none of the above<\/p>\n\n\n\n<p><strong>19. The buy back of shares results in reduction of <strong>_<\/strong>_______ capital of a company.<br><\/strong>a) nominal <br>b) paid-up <br>c) fully paid up <br>d) none of the above<\/p>\n\n\n\n<p><strong>20. Authorized capital of a company is <strong>_<\/strong>_______ to the extent of shares bought back.<\/strong><br>a) disclosed <br>b) reduction <br>c) not reduced <br>d) none of the above<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answers:<\/strong> <span class=\"has-inline-color has-vivid-red-color\">11)open market  12)68  13)equity  14)can not  15)premium \/ reserves  16)directors  17)Shareholders  18)destroyed  19)paid-up  20)not reduced<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>21. Buyback of shares leads to <strong>_<\/strong>________ in the EPS.<\/strong><br>a) disclosed <br>b) decerase <br>c) increase <br>d) none of the above<\/p>\n\n\n\n<p><strong>22. Buyback of own shares requires permission from <strong>_<\/strong>__________ .<\/strong><br>a) shareholders <br>b) Article of Association <br>c)  directors <br>d) none of the above<\/p>\n\n\n\n<p><strong>23. Discount on buyback is credited to <strong>_<\/strong>________ Account.<\/strong><br>a) General Reserve <br>b) Revaluation Reserve <br>c) Profit and Loss A\/c <br>d) Capital Reserve<\/p>\n\n\n\n<p><strong>24. Investment allowance reserve is a <strong>____________ <\/strong>.<br><\/strong>a) proceeds of fresh issue <br>b) paid up capital and reserves <br>c) securities premium <br>d) free reserve<\/p>\n\n\n\n<p><strong>25. Buyback of equity shares conditions are specified by section <strong>_<\/strong>_______ of the Companies Act.<\/strong><br>a) 66 <br>b)75 <br>c) 81 <br>d) 68<\/p>\n\n\n\n<p><strong>26. Buyback must be authorized by <strong>_________ <\/strong>.<br><\/strong>a) MOA <br>b) Auditors of the company <br>c) Central Government <br>d) AOA<\/p>\n\n\n\n<p><strong>27. Debt-equity ratio after buyback must not be more than <strong>_<\/strong>_______ .<\/strong><br>a) 01:01 <br>b) 01:02 <br>c) 02:02 <br>d) 02:01<\/p>\n\n\n\n<p><strong>28.  After completion of buyback, the return must be filed with <strong><em>____________<\/em><\/strong>.<\/strong><br>a) Registrar of companies <br>b) SEBI <br>c) Registrar and SEBI <br>d) Registrar of Stock Exchange<\/p>\n\n\n\n<p><strong>29. The company must open an <strong>_<\/strong>_________ A\/c to comply with the obligations of buyback.<\/strong><br>a) Saving <br>b) Currrent A\/c <br>c) Fixed deposit <br>d) Escrow<\/p>\n\n\n\n<p><strong>30. Buyback expenses may be treated as _________ expenses.<br><\/strong>a) Debenture <br>b) Revenue <br>c)  share capital <br>d) none of the above<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answer:<\/strong><span class=\"has-inline-color has-vivid-red-color\"><strong> <\/strong>21)increase  22)Article of Association  23)Capital Reserve  24)free reserve  25)68  26)AOA  27)02:01  28)Registrar and SEBI  29)Escrow  30)Revenue<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>31. Revaluation Reserve is not a <strong><em>___________ <\/em><\/strong>.<br><\/strong>a) Free Reserve <br>b) General Reserve <br>c) Revaluation reserve <br>d) none of the above<\/p>\n\n\n\n<p><strong>32. Discount on buyback is transferred to __________ A\/c.<br><\/strong>a) Capital Reserve <br>b) Profit and Loss A\/c <br>c) General Reserve <br>d) none of the above<\/p>\n\n\n\n<p><strong>33. Capital Redemption Reserve need not be created when the buyback is not out of <strong><em>_________ <\/em><\/strong>.<\/strong><br>a) divisible profit <br>b) Fresh issue<br>c) none of the above<\/p>\n\n\n\n<p><strong>34. The provisions of buy back of shares are specified in Section <strong>_<\/strong>__________ of Companies Act.<\/strong><br>a) 68 <br>b) 75 <br>c) 78 <br>d) 80<\/p>\n\n\n\n<p><strong>35. Maximum buy back in a year can be __________<strong>_<\/strong> %.<\/strong><br>a) 10% <br>b) 20% <br>c) 25% <br>d) 30%<\/p>\n\n\n\n<p><strong>36. The shares bought back should be <strong>_<\/strong>___________ .<\/strong><br>a) re-issued <br>b) pledged to loan <br>c) cancelled <br>d) ignored<\/p>\n\n\n\n<p><strong>37. The premium paid on buy back should be provided out of __________<strong>_<\/strong>.<\/strong><br>a) security premium <br>b) share capital <br>c) statutory reserves <br>d) capital reserves<\/p>\n\n\n\n<p><strong>38. The amount not collected by shareholders should be shown as <strong>_<\/strong>__________ .<br><\/strong>a) current liabilities <br>b) capital reserve <br>c) share capital <br>d) reserve capital<\/p>\n\n\n\n<p><strong>39. The Debt : Equity ratio, after buy-back should not exceed <strong>_<\/strong>________ .<br><\/strong>a) 02:01 <br>b) 01:01 <br>c) 01:02 <br>d) 03:04<\/p>\n\n\n\n<p><strong>40. The security under Buyback cannot be issued within ____________<strong>_<\/strong> .<\/strong><br>a) one year <br>b) two year <br>c) six months <br>d) three months<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answer:<\/strong><span class=\"has-inline-color has-vivid-red-color\"><strong> <\/strong>31)Free Reserve  32) Capital Reserve  33)divisible profit  34)68  35)25%  36)cancelled  37)security premium  38)current liabilities  39)02:01  40)two year<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>41. For a buy-back, a company should open an escrow account with <strong>__________ <\/strong>.<br><\/strong>a) stock exchange <br>b) broker <br>c) underwriter <br>d) bank<\/p>\n\n\n\n<p><strong>42. Board of directors can approve buy back upto _______<strong>_<\/strong>.<br><\/strong>a) 25% <br>b) 10% <br>c) 20% <br>d) 5%<\/p>\n\n\n\n<p><strong>43. The company before buy back has to submit a declaration of <strong>_<\/strong>__________ .<\/strong><br>a) liquidity <br>b) solvency <br>c) insolvency <br>d) competency<\/p>\n\n\n\n<p><strong>44. A company can buy back <strong>_<\/strong>___________ .<\/strong><br>a) preference shares <br>b) equity shares <br>c) none of the above <br>d) both (a) and (b)<\/p>\n\n\n\n<p><strong>45. Buyback of shares can be out of ___________<strong>_<\/strong>.<\/strong><br>a) profits only <br>b) proceeds of fresh issue only <br>c) capital profit only <br>d) free reserves or securities premium or proceeds of shares<\/p>\n\n\n\n<p><strong>46. The reserve, which is not a free reserve for the purpose of buyback of shares, is <strong>___________ <\/strong>.<br><\/strong>a) Profit &amp; Loss Account <br>b) dividend equalisation reserve <br>c) revaluation reserve <br>d) general reserve<\/p>\n\n\n\n<p><strong>47. Buyback of equity shares in any financial year shall not exceed 25% of its <strong>__________ <\/strong>.<br><\/strong>a) paid up equity capital of the company <br>b) paid up capital and reserves <br>c) paid up capital and free reserves <br>d) nominal capital and free reserves<\/p>\n\n\n\n<p><strong>48. Which of the following is a free reserve for the purpose of buyback of shares?<br><\/strong>a) workmen\u2019s compensation fund (after meeting liabilities) <br>b) capital redemption reserve <br>c) debenture redemption reserve <br>d) Forfeited Shares Account<\/p>\n\n\n\n<p><strong>49. In case equity shares are bought back out of free reserve, amount equal to face value of equity shares bought back should be transferred to <strong>_<\/strong>__________.<br><\/strong>a) General Reserve Account <br>b) Development Rebate Reserve <br>c) Sinking Fund Account <br>d) Capital Redemption Reserve Account<\/p>\n\n\n\n<p><strong>50. The objective of buyback of equity shares is __________<strong>_<\/strong>.<br><\/strong>a) To reduce earning per share <br>b) To increase share capital <br>c) To bring cash in business <br>d) None of the above<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answer:<\/strong><span class=\"has-inline-color has-vivid-red-color\"><strong> <\/strong>41)bank  42)10%  43)solvency  44)both a &amp; b  45)free reserves or securities premium or proceeds of shares  46)revaluation reserve  47)paid up equity capital of the company  48)workmen\u2019s compensation fund (after meeting liabilities)  49)Capital Redemption Reserve Account  50)None of the above<\/span><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":7292,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,7],"tags":[3006],"class_list":["post-7218","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bcom","category-degree-college","tag-buy-back-of-shares-mcq"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/7218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=7218"}],"version-history":[{"count":4,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/7218\/revisions"}],"predecessor-version":[{"id":35580,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/7218\/revisions\/35580"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/7292"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=7218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=7218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=7218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}