Accounting for share Capital Test

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Accounting for share Capital Test - 30

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Weekly Quiz Competition

Question 1
1 / -0

According to SEBI guideline a company must receive a minimum of _______% subscription before making any allotment of shares to the public.

A
$$75$$

B
$$90$$

C
$$50$$

D
$$25$$

Solution

Minimum Subscription refers to the minimum shares the company needs to get from the public out of the total issue by the date of closure. Presently every company need to raise 90% of the issued amount.
Else, the company shall refund the whole amount received. This 90 % has to be exclusive of the cheques that are not cleared.
Question 2
1 / -0

Which of the following restriction is not applicable to a Private Ltd. Company?

A
To open overseas branch/ office

B
Restrict number of members to $$200$$

C
Invite application for public subsription

D
Invite application for public deposits
Solution
As per section 2(68) of companies act, 2013 "private company" restrict to-
Having a minimum paid-up share capital of one lakh rupees or such higher
Any invitation to the public to subscribe for any securities of the company
Having maximum of 200 members.
Question 3
1 / -0

Shares of a Pvt. Ltd. company are listed ___________.

A
In regional stock exchange

B
Not listed at all

C
In NSE

D
In BSE

Solution

Shares of "Private Limited" company are prohibits any invitation to the public to subscribe for any securities of the company thus it is not listed on any stock exchanges.
Question 4
1 / -0

Which of these types of shares cannot be issued at discount?

A
New class of shares

B
Preference shares

C
Shares with differential dividend

D
all of the above

Solution

When Shares are issued at a price lower than their face value they are said to have been issued at a discount.
Shares can be issued at discount subject to the following conditions:
(a) The shares must belong to a class already issued.
(b) Discount rate should not be more than 10%.
Question 5
1 / -0

Minimum amount to be called up at the time of share application is ________.

A
$$5$$%

B
$$10$$%

C
$$15$$%

D
$$25$$%

Solution

As per Section 39, the amount payable on application on every share shall not be less than 5% of the nominal value of the share as per Companies Act or such other percentage as may be specified by the SEBI in this behalf.
Question 6
1 / -0

Share to be issued at discount must be issued within _________ from the date of central government approval.

A
$$2$$ months

B
$$6$$ months

C
one year

D
three months
Question 7
1 / -0

Discount on issue of shares is _________.

A
amortized

B
written in the first year

C
netted of from share premium A/c

D
all of the above
Question 8
1 / -0

A share certificate is required to be signed by _________.

A
Two directors and company secretary

B
Chairman of the company

C
Attorney of the company

D
Chartered accountant
Solution
Rule 5 read and form SH.1 contains a provision for the signature of two Directors and a Secretary as a mandate for issuing share certificate. Thus, below-mentioned signatories are required to put their signatures on a share certificate:
- Two Directors specifically authorized by the Board of Directors of the company for the purpose, or the Committee of the Board if so authorized by the Board.
- The Company Secretary or any other person authorized by the Board.
Question 9
1 / -0

A public company can issue share at a premium not more than __________.

A
$$10$$%

B
$$30$$%

C
no such limit prescribed

D
$$50$$%
Question 10
1 / -0

When shares are allotted for consideration other than cash, the A/c to be debited would be ____________.

A
Goodwill A/c

B
Capital reserve A/c

C
Concerned assets A/c

D
Bonus share A/c

Solution

Shares issued for consideration other than cash means when shares of the company are issued to somebody for something which is not cash. It can be issued of shares to a vendor against the purchase of assets.
In case if purchase of assets from a vendor, following journal entry is passed:
Concerned Assets A/c ……… Dr. (individually with purchase price of each asset)
To Vendor’s A/c (with purchase consideration)

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 30

Result

Accounting for share Capital Test - 30

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SHARING IS CARING

Question 1

$$75$$

$$90$$

$$50$$

$$25$$

Solution

Question 2

To open overseas branch/ office

Restrict number of members to $$200$$

Invite application for public subsription

Invite application for public deposits

Solution

Question 3

In regional stock exchange

Not listed at all

In NSE

In BSE

Solution

Question 4

New class of shares

Preference shares

Shares with differential dividend

all of the above

Solution

Question 5

$$5$$%

$$10$$%

$$15$$%

$$25$$%

Solution

Question 6

$$2$$ months

$$6$$ months

one year

three months

Question 7

amortized

written in the first year

netted of from share premium A/c

all of the above

Question 8

Two directors and company secretary

Chairman of the company

Attorney of the company

Chartered accountant

Solution

Question 9

$$10$$%

$$30$$%

no such limit prescribed

$$50$$%

Question 10

Goodwill A/c

Capital reserve A/c

Concerned assets A/c

Bonus share A/c

Solution

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