Accounting for share Capital Test

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Accounting for share Capital Test - 34

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Weekly Quiz Competition

Question 1
1 / -0

X was issued $$500$$ shares of ABC Ltd. at $$Rs. 12$$ including $$Rs. 2$$ premium. He paid only application money of $$Rs. 3$$ and failed to pay the allotment money of $$Rs. 4$$ including premium. Consequently his shares were forfeited. Y was also allotted $$400$$ shares he paid $$Rs. 3$$ on application, $$Rs. 4$$ at the time of allotment and failed to pay the call money of $$Rs. 5$$. His shares were also subsequently forfeited. The company subsequently re-issued $$800$$ shares at $$Rs. 8$$ fully paid up as $$Rs. 10$$. Find the amount left in share forfeited A/c.

A
$$Rs. 500$$

B
$$Rs. 400$$

C
$$Rs. 300$$

D
$$Rs. 100$$
Question 2
1 / -0

The audit of joint stock companies is done _________________.

A
Optionally

B
When ordered by the central government

C
Mandatorily every year

D
Once in five year5

Solution

The companies Act, 1956 requires the compulsory audit of every Joint Stock Company every year and therefore, an auditor is to be appointed to do the job and submit his report to the shareholders of the Company.
Question 3
1 / -0

On a share of $$Rs. 100$$ issued at a premium of $$Rs. 10$$ the whole amount has been called up but in the case of a shareholder only $$Rs. 80$$ has been received. On reissue of the shares at $$Rs. 90$$ fully paid up the discount on reissue would be ___________.

A
$$Rs. 10$$ Debited to Share Forfeiture A/c

B
$$Rs. 30$$ Debited to Share Forfeiture A/c

C
$$Rs. 20$$ Debited to Share Forfeiture A/c

D
$$Rs. 20$$ Debited to Discount A/c

Solution

Discount on reissue of shares = Nominal value - Reissue Price
= Rs. 100 - Rs. 90 = Rs. 10
Such discount on reissue is adjusted from the Share Forfeiture A/c because it contains the amount paid by the previous shareholder that has been forfeited which is a capital profit for the company.
Question 4
1 / -0

On a share of $$Rs. 100$$ issued at a premium of $$Rs. 10$$ the whole amount has been called up but in the case of a shareholder only $$Rs. 80$$ has been received and subsequently these were forfeited. What should be the minimum price at which the forfeited shares can be reissued?

A
$$Rs. 20$$

B
$$Rs. 30$$

C
$$Rs. 70$$

D
$$Rs. 80$$

Solution

The Re-issue price of forfeited shares must be at least equal to the difference between the paid-up value of re-issued Shares and the Amount Forfeited on Re-issue Shares. In other words, Re-issue price must not be less than the amount unpaid on Forfeited Shares.
Paid-up value of the re-issued shares= Rs. 100
Amount forfeited on Re-issued shares= Rs. 80
Minimum price at which the forfeited shares can be reissued= Rs. 100 (-) 80
= Rs. 20
Therefore, A is the correct option.
Question 5
1 / -0

ABC Ltd. purchased a plant of Rs.$$30,000$$ from DEF Ltd. The company paid Rs.$$8,000$$ in cash and agreed to allottee sufficient number of equity shares of Rs.$$10$$ each at a premium of $$10\%$$. Find the number of shares to be allotted to DEF Ltd.

A
$$20,000$$

B
$$22,000$$

C
$$2,000$$

D
$$2,200$$

Solution
Question 6
1 / -0

As per Companies Act, $$2013$$ as private company can have ________ members.

A
$$30$$

B
$$50$$

C
$$100$$

D
$$200$$

Solution

A private limited company with a minimum of only 2 members (and maximum of 200), as per the provisions of the Companies. The Public limited type of entity limits the owner's liability to their ownership stake, and restricts shareholders from publicly trading shares.
Question 7
1 / -0

As per Companies Act, $$2013$$ a company must prepare its books as per _________.

A
Cash basis

B
Accrual basis

C
Hybrid basis

D
Accrual basis and according to double entry system

Solution

As per companies act, 2013 a company must prepare its books as per accrual basis and according to double entry system.
Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting:
Question 8
1 / -0

Shares issued to the promoters for their services is debited to ___

A
Goodwill a/c

B
Capital reserve a/c

C
General reserve a/c

D
Cash a/c
Question 9
1 / -0

Profit from the date of purchase of business to the date of incorporation of the company is called

A
Profit prior to incorporation

B
Pre-acquisition A/c

C
Prior-period profits

D
Pre-launch profits
Question 10
1 / -0

In dematerialization of shares ______ passes the physical shares to company for making it into electronic form.

A
Shareholder

B
Depository participant

C
Bank

D
None of the above

Solution

The depository participant is an agent of the depository. An investor has to interact only with a DP and not with the depository for all his dealing in shares in electronic form. In dematerialization of shares, depository participant passes the physical shares to the company for making it into electronic form. Depository participant refers to the agent between depository and investors.Hence, option (B) is the correct answer.

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 34

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Accounting for share Capital Test - 34

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SHARING IS CARING

Question 1

$$Rs. 500$$

$$Rs. 400$$

$$Rs. 300$$

$$Rs. 100$$

Question 2

Optionally

When ordered by the central government

Mandatorily every year

Once in five year5

Solution

Question 3

$$Rs. 10$$ Debited to Share Forfeiture A/c

$$Rs. 30$$ Debited to Share Forfeiture A/c

$$Rs. 20$$ Debited to Share Forfeiture A/c

$$Rs. 20$$ Debited to Discount A/c

Solution

Question 4

$$Rs. 20$$

$$Rs. 30$$

$$Rs. 70$$

$$Rs. 80$$

Solution

Question 5

$$20,000$$

$$22,000$$

$$2,000$$

$$2,200$$

Solution

Question 6

$$30$$

$$50$$

$$100$$

$$200$$

Solution

Question 7

Cash basis

Accrual basis

Hybrid basis

Accrual basis and according to double entry system

Solution

Question 8

Goodwill a/c

Capital reserve a/c

General reserve a/c

Cash a/c

Question 9

Profit prior to incorporation

Pre-acquisition A/c

Prior-period profits

Pre-launch profits

Question 10

Shareholder

Depository participant

Bank

None of the above

Solution

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