Accounting for share Capital Test

Result

Accounting for share Capital Test - 46

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

If a company has the word limited at the end of its name, this means that the _________.

A
Shareholder's liability for the debts of the business is restricted

B
Number of shareholders have fixed upper limit

C
Number of members can never be increased

D
There is a limit to the number of shares that can be issued

Solution

The limited liability of these companies means that the personal assets of members are not at risk when they invest in the company. If the company experiences financial difficulties, its debts do not typically become the debts of the shareholders.

Login to see Solution & AIR
Question 2
1 / -0

It is UNCOMMON in calls in advance that ______________________.

A
Directors pay $8\%$ interest on the amount paid by shareholder

B
Directors pay $6\%$ interest on the amount paid by shareholder

C
Directors pay $5\%$ interest on the amount paid by shareholder

D
Directors pay $4\%$ interest on the amount paid by shareholder
Question 3
1 / -0

ABC Inc issues $30,000$ shares of Rs. $1$ at Rs $1.30$ for each share. Which of the following statement is true?

A
Ordinary share capital will increase by Rs. $30,000$ and share premium will increase by Rs. $39,000$ .

B
Ordinary share capital will increase by Rs. $39,000$ and share premium will increase by Rs. $9,000$ .

C
Ordinary share capital will increase by Rs. $39,000$ and share premium will be unaffected.

D
Ordinary share capital will increase by Rs. $30,000$ and share premium will increase by Rs. $9,000$ .
Question 4
1 / -0

What is the nature of expenses incurred on the issue of shares?

A
Revenue

B
Capital

C
Neither (a) nor (b)

D
Both (a) and (b)

Solution

Capital Expenses or Expenditures are payments by a business for fixed assets, like buildings and equipment Capital expenses are not used for ordinary day-to-day operating expenses of a business. Another way to consider capital expenses Is that they are used to buying assets that have a useful life of more than one year. Expenses incurred on issue of shares is capital in nature as shares are issued for lifetime of the company and are not day-to-day expenses.

Login to see Solution & AIR
Question 5
1 / -0

Shares of some limited company are ___________.

A
Floating assets

B
Liquid assets

C
Fixed assets

D
Intangible assets

Solution

Company whose share is listed in stock exchange can be treated as liquid asset, as there is high level of engagement of buyer and seller. It makes possible to realize instant cash by selling the share of listed company. E.g. Shares of Reliance, TATA, SBI, HDFC.

Login to see Solution & AIR
Question 6
1 / -0

"Share holder wealth" in a firm is represented by the _______.

A
number of people employed in the firm

B
book value of the firm's assets less the book value of its liabilities

C
amount of salary paid to its employees

D
market price per share of the firm's common stock
Question 7
1 / -0

A company that has the liability of its members limited by the Memorandum of Association to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up it termed______________.

A
Limited Liability Company

B
Public Limited Liability Company

C
General Limited Liability Company

D
Company Limited by Guarantee

Solution

In case of company limited by guarantee, such guarantee invoked if company is in winding up. It is owned by members called guarantors who agree to pay a nominal amount in the event of company's being wound up.

Login to see Solution & AIR
Question 8
1 / -0

When shares are forfeited, share capital account is ___________.

A
Debited

B
Credited

C
Adjusted

D
None of these

Solution

When shares issued at par are forfeited the accounting treatment will be as follows: (i) Debit Share Capital Account with amount called up (whether received or not) per share up to the time of forfeiture.

Login to see Solution & AIR
Question 9
1 / -0

In case of under subscription, ________ is NOT found.

A
Total no of application received is equal to total no of shares offered

B
Total no of application received is less than total no of shares offered

C
Total no of application is more than the total no of shares offered

D
Both a & c

Solution

Under subscribed is a situation in which the demand for an issue of securities such as an initial public offering or another offering of securities is less than the number of shares issued.

Login to see Solution & AIR
Question 10
1 / -0

When there is an increase in the authorized capital with which the company is registered, ______ is to be altered.

A
Memorandum of association

B
Articles of association

C
Paid up capital

D
Subscribed capital

Solution

Memorandum of association specify the authorized capital of the company. To increase authorized capital, we need to alter the capital clause of the memorandum of association.

Login to see Solution & AIR

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 46

Result

Accounting for share Capital Test - 46

Score

-

Rank

-

SHARING IS CARING

Question 1

Shareholder's liability for the debts of the business is restricted

Number of shareholders have fixed upper limit

Number of members can never be increased

There is a limit to the number of shares that can be issued

Solution

Question 2

Directors pay 8%8\%8% interest on the amount paid by shareholder

Directors pay 6%6\%6% interest on the amount paid by shareholder

Directors pay 5%5\%5% interest on the amount paid by shareholder

Directors pay 4%4\%4% interest on the amount paid by shareholder

Question 3

Ordinary share capital will increase by Rs.30,00030,00030,000 and share premium will increase by Rs.39,00039,00039,000.

Ordinary share capital will increase by Rs.39,00039,00039,000 and share premium will increase by Rs.9,0009,0009,000.

Ordinary share capital will increase by Rs.39,00039,00039,000 and share premium will be unaffected.

Ordinary share capital will increase by Rs.30,00030,00030,000 and share premium will increase by Rs.9,0009,0009,000.

Question 4

Revenue

Capital

Neither (a) nor (b)

Both (a) and (b)

Solution

Question 5

Floating assets

Liquid assets

Fixed assets

Intangible assets

Solution

Question 6

number of people employed in the firm

book value of the firm's assets less the book value of its liabilities

amount of salary paid to its employees

market price per share of the firm's common stock

Question 7

Limited Liability Company

Public Limited Liability Company

General Limited Liability Company

Company Limited by Guarantee

Solution

Question 8

Debited

Credited

Adjusted

None of these

Solution

Question 9

Total no of application received is equal to total no of shares offered

Total no of application received is less than total no of shares offered

Total no of application is more than the total no of shares offered

Both a & c

Solution

Question 10

Memorandum of association

Articles of association

Paid up capital

Subscribed capital

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.

Directors pay $8\%$ interest on the amount paid by shareholder

Directors pay $6\%$ interest on the amount paid by shareholder

Directors pay $5\%$ interest on the amount paid by shareholder

Directors pay $4\%$ interest on the amount paid by shareholder

Ordinary share capital will increase by Rs. $30,000$ and share premium will increase by Rs. $39,000$ .

Ordinary share capital will increase by Rs. $39,000$ and share premium will increase by Rs. $9,000$ .

Ordinary share capital will increase by Rs. $39,000$ and share premium will be unaffected.

Ordinary share capital will increase by Rs. $30,000$ and share premium will increase by Rs. $9,000$ .