Accounting for share Capital Test

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Accounting for share Capital Test - 17

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Weekly Quiz Competition

Question 1
1 / -0

When shares are forfeited, share capital account is debited by __________.

A
paid up amount of shares

B
called up amount of shares

C
face value of shares

D
uncalled capital

Solution

When the shares are forfeited, all accounting entries which were passed at the time of issue must be reversed.
Hence while forfeited, share capital account should be debited by the amount called up on shares.
Question 2
1 / -0

The discount on re-issue of forfeited shares is debited to the ________ A/c.

A
Share capital

B
Shares forfeited

C
Bank

D
Discount on issue of shares

Solution

When the forfeited shares are re issued at discount, accounting entry will be:

Bank Account Dr. (with the amount received on re issue)
Share Forfeited A/c Dr. (with the amount of discount)
To Share Capital A/c (with the amount of paid up amount)
Question 3
1 / -0

On forfeiture of shares, which of the following account is credited with the amount of money already received on such shares?

A
Shares forfeited a/c

B
Share capital a/c

C
Unpaid calls a/c

D
Share premium a/c

Solution

At the time of forfeiture of share, all accounting entries must be reversed. The amount which is already received will be transferred to share forfeited account.
Question 4
1 / -0

Forfeiture of shares results in compulsory termination of _____________ due to non-payment of allotment/call money.

A
allotment

B
membership

C
subscription

D
issue

Solution

In absence of payment of allotment money by the shareholders, shares can be forfeited by the company. In case of forfeiture of shares, the membership is compulsorily terminated.
Question 5
1 / -0

Shares which carry preferential rights are called _________.

A
Equity shares

B
Preference shares

C
Sweaty equity

D
Greenshoe

Solution

Preference shares are the shares with dividend that are paid out to shareholders before equity shares dividend. If the company goes in to liquidation, preference shares are paid first from the companies assets.
Question 6
1 / -0

The part of the capital which will be called up only in the event of winding up of the company is called _____ capital.

A
issued

B
paid-up

C
reserve

D
uncalled

Solution

Uncalled capital may be converted in to reserve capital. Reserve capital will be called at the time of winding up of the company to meet the liabilities.
Question 7
1 / -0

______ is deducted from the called-up capital in order to calculate paid-up capital.

A
Calls in arrear

B
Calls in advance

C
Uncalled capital

D
Reserve capital

Solution

The amount which is not paid by the shareholders on call, the unpaid amount is called calls in arrears.
The amount of calls in arrears will be deducted from called up capital to show the net paid up capital.
Question 8
1 / -0

The profit on re-issue of shares is transferred to ________.

A
General reserve

B
Capital reserve

C
P/L Account

D
P/L appropriation account

Solution

Forfeited shares can be re-issued. Any amount of profit on re-issue is a capital receipt and should be transferred to capital reserve account because this profit is a capital gain for the company.
Question 9
1 / -0

When an existing company takes over the business of one or more existing companies, it is called _____________.

A
Amalgamation

B
Absorption

C
Internal reconstruction

D
None of these

Solution

The process in which two or more than companies are wound up to form a new company, which acquires their business is known as Amalgamation. The process in which one company takes over the other company is known as Absorption.
Question 10
1 / -0

For amalgamation in the nature of merger, the shareholders holding at least _______or more of the facevalue of equity shares of the transferor company becomes the equity shareholders of the transferee company.

A
90%

B
80%

C
100%

D
None of these

Solution

Shareholders holding not less than 90% of the face value of the equity shares of the transferor company (other than the equity shares already held therein, immediately before amalgamation by the transferee company or its subsidiaries or their nominees) become equity shareholders of the transferee company by virtue of amalgamation.

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 17

Result

Accounting for share Capital Test - 17

Score

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Rank

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SHARING IS CARING

Question 1

paid up amount of shares

called up amount of shares

face value of shares

uncalled capital

Solution

Question 2

Share capital

Shares forfeited

Bank

Discount on issue of shares

Solution

Question 3

Shares forfeited a/c

Share capital a/c

Unpaid calls a/c

Share premium a/c

Solution

Question 4

allotment

membership

subscription

issue

Solution

Question 5

Equity shares

Preference shares

Sweaty equity

Greenshoe

Solution

Question 6

issued

paid-up

reserve

uncalled

Solution

Question 7

Calls in arrear

Calls in advance

Uncalled capital

Reserve capital

Solution

Question 8

General reserve

Capital reserve

P/L Account

P/L appropriation account

Solution

Question 9

Amalgamation

Absorption

Internal reconstruction

None of these

Solution

Question 10

90%

80%

100%

None of these

Solution

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