Accounting for share Capital Test

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Accounting for share Capital Test - 20

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Weekly Quiz Competition

Question 1
1 / -0

Section $$12$$ requires that One Person company shall mention along with its name(in brackets) ____________.

A
One Person Company

B
OPC

C
One Person Company Pvt Ltd or Ltd

D
None of the above

Solution

To encourage the self employment, the Companies Act 2013 has allowed to open "one person company" i.e. OPC. One person company requires one member and one nominee.
Section 12 of the companies act requires that the word "One Person Company" should be mentioned in brackets.
Question 2
1 / -0

With regard to government company, identify the statement representing correct feature of Government company.

A
Govt company can't sue the government in its own name as litigant

B
Employees of government company are not employees of central/state government

C
A government company can't wound like any other company

D
A government company must use either limited or Private Limited at the end of its name
Question 3
1 / -0

Which of the following generally not result in increase in total dividend liability?

A
Share-split

B
Right Issue

C
Bonus Issue

D
All of the above

Solution

In share split though the number of shares increases the Paid up capital remain unchanged and the dividend payout remains the same.
In Right Issue and Bonus issue, the number of shares as well as Paid up capital increases and the New Rights shares and Bonus shares are eligible for pro-rata dividend at the time of declaration of dividend.
Question 4
1 / -0

A private company is required compulsorily to limit through its articles, the number of members to __________.

A
$$20$$

B
$$50$$

C
$$200$$

D
$$500$$

Solution

A company is governed by the Companies Act, 1956. 2. Number of members – In a private company the minimum number is 2 and the maximum is 50. In a public company the minimum number is 7 and there is no maximum limit set by Law.
Question 5
1 / -0

Restrictions on transferability of shares is relevant in case of _______.

A
Only private company having share capital

B
Private company incorporated as a pure guarantee company

C
Private company having either Share capital or Guarantee company

D
None of these

Solution

In essence, private companies possess certain characteristics, significant of which is the unfettered right to restrict share transfers. Section 3(iii) of the Companies Act defines private company as a company, which by its articles-
“(a) restricts the right to transfer its shares, if any;
While public company is a company which is not a private company.
And moreover, the shares of a public company are freely transferable.
Question 6
1 / -0

______ of net surplus of a life insurance company is given to policyholders as bonus.

A
90%

B
80%

C
95%

D
None of these

Solution

As per the LIC Act, the Corporation has to distribute 95 per cent of its surplus to policyholders as bonuses, the balance of 5 per cent amounting to Rs 2,206.70 crore was the share of the government.
Question 7
1 / -0

In case of a company limited by shares, a shareholder has paid full on his shares, his liability will be.

A
As decided by directors

B
An equal amount to already paid up value of share

C
Nil

D
None of these

Solution

In a company limited by shares, the liability of the shareholders for company debts is limited to the capital originally invested in the business i.e. the nominal value of the shares they own
Question 8
1 / -0

The committee to recommend formation of POC(One Person Company) in India is __________?

A
Alagh

B
J.J.Irani

C
H.C.Baba

D
None of these

Solution

In India, in the year 2005, the JJ Irani Committee recommended the formation of OPC. It had suggested that such an entity may be provided with a simpler legal regime through exemptions so that the small entrepreneur is not compelled to devote considerable time, energy and resources on complex legal compliance.
Question 9
1 / -0

The basic purpose of Green shoe option is to act as stabilizing force when issue is ___________.

A
Under subscribed

B
Over subscribed

C
Either Under or Over subscribed

D
None of these

Solution

Rationale for a greenshoe option
The purpose of an issuer and/or a selling security holder providing an underwriter with an over-allotment is to allow the underwriter to stabilize the after-market for the issuer's securities in the period immediately after the public offering begins.
Question 10
1 / -0

The amount of minimum subscription must be stated in the _________________.

A
Memorandum

B
Articles

C
Prospectus

D
Statement-in-lieu of prospectus

Solution

The amount of minimum subscription must be stated in the prospectus. As per guidelines of the Securities Exchange Board of India (SEBI), a company making any public issue of shares, debentures, etc. must receive at least 90% of Minimum Subscription before making allotment of shares or debentures to the public.

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 20

Result

Accounting for share Capital Test - 20

Score

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Rank

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SHARING IS CARING

Question 1

One Person Company

OPC

One Person Company Pvt Ltd or Ltd

None of the above

Solution

Question 2

Govt company can't sue the government in its own name as litigant

Employees of government company are not employees of central/state government

A government company can't wound like any other company

A government company must use either limited or Private Limited at the end of its name

Question 3

Share-split

Right Issue

Bonus Issue

All of the above

Solution

Question 4

$$20$$

$$50$$

$$200$$

$$500$$

Solution

Question 5

Only private company having share capital

Private company incorporated as a pure guarantee company

Private company having either Share capital or Guarantee company

None of these

Solution

Question 6

90%

80%

95%

None of these

Solution

Question 7

As decided by directors

An equal amount to already paid up value of share

Nil

None of these

Solution

Question 8

Alagh

J.J.Irani

H.C.Baba

None of these

Solution

Question 9

Under subscribed

Over subscribed

Either Under or Over subscribed

None of these

Solution

Question 10

Memorandum

Articles

Prospectus

Statement-in-lieu of prospectus

Solution

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