Accounting for share Capital Test

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Accounting for share Capital Test - 1

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Weekly Quiz Competition

Question 1
1 / -0

Share Application A/c and Share Allotment A/c is:

A
Nominal Account

B
Personal Account

C
Fictitious Account

D
Real Account

Solution

Explanation:

Share Application Account and Share Allotment Account is personal account.

As the share is capital for business received by the owner of business or any other person. So the person investing in the business in The form of share is giver. Rule of Personal A/c : "Debit the receiver, credit the giver" is applicable.
Question 2
1 / -0

What rate of interest is to be used on calls in arrear as per the TABLE - F

A
12%

B
6%

C
9%

D
10%

Solution

Explanation:

As per the Companies Act, 2013, when Table F is followed by the company, rate of interest on calls in arrear should be 10% p.a.When any shareholder fails to pay the amount due on allotment or on any of the calls, such amount is known as 'Calls-in-Arrears'/'Unpaid Calls'. Interest at a rate 10% shall have to be paid on Calls-in-arrears for the period from the day fixed for payment and the time of actual payment thereon.
Question 3
1 / -0

A company cannot issue its share at _______

A
Par

B
Premium

C
Both Discoun and Par

D
Discount

Solution

Explanation:

As per the Companies Act, 2013, (new guidelines) a company cannot issue its shares at discount. Company can issue its shares at par and premium.
Question 4
1 / -0

Which of the following is not true about a private company?

A
Private company ends with the words ‘Private Limited’.

B
Minimum paid up share capital Rs.1,00,000

C
Minimum paid up capital is 5,00,000

D
Restriction on the right to transfer its shares

Solution

Explanation:

Minimum paid up capital of a private company is 1,00,000. A private company cannot transfer its shares and all private companies’ ends with the words ‘Private Limited’.
Question 5
1 / -0

Securities premium account can be utilized for:

A
To Distribute it among the promoters

B
To write off the preliminary expenses

C
To create the General Reserve

D
To pay the dividend to the equity shareholders

Solution

Explanation:

As per the section 52 of the Companies Act, 2013 restricts the use of securities premium received, it can be used for the following purposes:

(i) To write off the preliminary expenses

(ii) To issue fully paid bonus shares to promoters

(iii) To purchase own shares

(iv) To write off the expenses
Question 6
1 / -0

In case of a public company, it must have at least _____ Directors.

A
3

B
2

C
5

D
7

Solution

Explanation:

A Public company should have at least 3 Directors and a private company must have at least 2 Directors.
Question 7
1 / -0

Which of the following is not true about Preference Shares?

A
Right to Dividend

B
Can be Redeemed

C
Can be converted

D
No Dividend

Solution

Explanation:

Preference Shares are those shares on dividend to be paid as fixed amount. These shares are convertible and can be redeemed.
Question 8
1 / -0

What is paid to the Shareholders?

A
Salary

B
Dividend

C
Debentures

D
Interest

Solution

Explanation:

Dividend is paid to the shareholders.

Interest is paid to the Debenture holders
Question 9
1 / -0

Share Forfeiture account is a:

A
Fictitious Asset

B
Personal Account

C
Nominal Account

D
Misc. Expenditure

Solution

Explanation:

All accounts which are prepared for the calculation of profit or loss are nominal accounts. All assets accounts are real and liabilities are personal accounts.
Question 10
1 / -0

As per the Companies Act, 2013, companies cannot issue ______________

A
Irredeemable Preference Shares

B
Preference Shares

C
Bonus Shares

D
Equity Shares

Solution

Explanation:

There are two types of preference shares in context to the redemption i.e. Redeemable and Non-redeemable preference shares. As per the Companies Act, 2013, companies cannot issue Irredeemable Preference Shares. Redeemable preference shares are those which can be redeemed by the company.

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 1

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Accounting for share Capital Test - 1

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SHARING IS CARING

Question 1

Nominal Account

Personal Account

Fictitious Account

Real Account

Solution

Question 2

12%

6%

9%

10%

Solution

Question 3

Par

Premium

Both Discoun and Par

Discount

Solution

Question 4

Private company ends with the words ‘Private Limited’.

Minimum paid up share capital Rs.1,00,000

Minimum paid up capital is 5,00,000

Restriction on the right to transfer its shares

Solution

Question 5

To Distribute it among the promoters

To write off the preliminary expenses

To create the General Reserve

To pay the dividend to the equity shareholders

Solution

Question 6

3

2

5

7

Solution

Question 7

Right to Dividend

Can be Redeemed

Can be converted

No Dividend

Solution

Question 8

Salary

Dividend

Debentures

Interest

Solution

Question 9

Fictitious Asset

Personal Account

Nominal Account

Misc. Expenditure

Solution

Question 10

Irredeemable Preference Shares

Preference Shares

Bonus Shares

Equity Shares

Solution

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