Accounting for share Capital Test

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Accounting for share Capital Test - 23

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Weekly Quiz Competition

Question 1
1 / -0

The price payable by the purchasing company to selling company for taking over its business is called ___________.

A
Accounting treatment

B
Recording

C
Purchase consideration

D
None of the Above

Solution

Purchase consideration is the amount paid by the transferee company to the transferor company for the purchase if the business. Hence, the price payable by the purchasing company to selling company for taking over its business is called purchase consideration.
Question 2
1 / -0

Reducing the capital of a company is called ___________.

A
Internal reconstruction

B
External reconstruction

C
Consolidation

D
None of these

Solution

Reconstruction in which the once again reorganized by reevaluation assets and liabilities and writing off the losses by reducing the paid up of shares. Such a process is called internal reconstruction which is carried out without liquidating the company.
Question 3
1 / -0

Intrinsic value of a share is given by_________.

A
Total net assets/No of shares

B
Total assets/No of shares

C
Share capital/No of shares

D
Market capitalization/No of shares

Solution

To calculate the intrinsic value of a stock, first calculate the growth rate of the dividends by dividing the company's earnings by the dividends it pays to its shareholders.
Question 4
1 / -0

The company into which transfer of company is amalgamated is called as _________.

A
Transferee company

B
Transferor company

C
Holding company

D
None of the above

Solution

A company which acquires the assets from the transferor company is called as transferee company. Hence, the company into which transferor company is amalgamated is called as transferee company.
Question 5
1 / -0

Long term capital loss can be set off from which of the following?

A
Short term capital gain only

B
Long term capital gain only

C
Income from business and profession

D
Capital gain head of income
Question 6
1 / -0

There will be 'Revenue profits' if the shares are acquired by the holding company.

A
On the date of the given Balance Sheets

B
During the current year

C
At the beginning of the current year

D
After the presentation of Balance Sheets
Question 7
1 / -0

Types of dividend declared and paid by subsidiary company to shareholders after acquiring shares by the holding company, are _______________.

A
Proposed dividend

B
Capital dividend

C
Revenue dividend and composite dividend

D
All the above
Question 8
1 / -0

Sec $$494$$ of the Companies Act $$1956$$ facilitates ____________________.

A
Amalgamation

B
Absorption

C
External reconstruction

D
All of these

Solution

Section 494 in The Companies Act, 1956. 494. Power of liquidator to accept shares, etc., as consideration for sale of property of company
(2) Any sale or arrangement in pursuance of this section shall be binding on the members of the transferor company.
Question 9
1 / -0

As per Companies Act 2013, Public company has minimum capital of ______.

A
Rs.15 Lakh

B
Rs.25 Lakh

C
Rs.5 Lakh

D
Rs.10 Lakh

Solution

Companies Act 2013 defines that every company must have a minimum capital before starting of the business. All new companies must authorize with a minimum amount of capital.
For a private limited company the limit is Rs,1 Lakh while for Public Limited Company the minimum required capital is Rs. 5 Lakhs.
Question 10
1 / -0

For which of the following purposes securities premium can be used:

A
in writing off the discount on debentures of the company

B
in writing off the preliminary expenses of the company

C
issuing bonus shares

D
in providing for the premium payable on the redemption of preference shares

E
All of the above

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 23

Result

Accounting for share Capital Test - 23

Score

-

Rank

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SHARING IS CARING

Question 1

Accounting treatment

Recording

Purchase consideration

None of the Above

Solution

Question 2

Internal reconstruction

External reconstruction

Consolidation

None of these

Solution

Question 3

Total net assets/No of shares

Total assets/No of shares

Share capital/No of shares

Market capitalization/No of shares

Solution

Question 4

Transferee company

Transferor company

Holding company

None of the above

Solution

Question 5

Short term capital gain only

Long term capital gain only

Income from business and profession

Capital gain head of income

Question 6

On the date of the given Balance Sheets

During the current year

At the beginning of the current year

After the presentation of Balance Sheets

Question 7

Proposed dividend

Capital dividend

Revenue dividend and composite dividend

All the above

Question 8

Amalgamation

Absorption

External reconstruction

All of these

Solution

Question 9

Rs.15 Lakh

Rs.25 Lakh

Rs.5 Lakh

Rs.10 Lakh

Solution

Question 10

in writing off the discount on debentures of the company

in writing off the preliminary expenses of the company

issuing bonus shares

in providing for the premium payable on the redemption of preference shares

All of the above

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