Accounting for share Capital Test

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Accounting for share Capital Test - 47

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Weekly Quiz Competition

Question 1
1 / -0

A company forfieted 1,000 shares on 10 each (which ere issued at par) held by Saurabh for non-payment of allotment money of Rs. 4 per share. The called-up value per share was t 8. On forfeiture, the amount debited to share capital account will be _____________.

A
Rs. 10,000

B
Rs. 8,000

C
Rs. 2,000

D
Rs. 18,000
Question 2
1 / -0

Premium received on shares is treated as_______.

A
Capital reserve

B
Capital receipt

C
Capital revenue

D
All of the above
Question 3
1 / -0

Share may be issued :

A
For cash

B
For consideration other than cash

C
For both (a) and (b)

D
None of the above

Solution

Share generally issued for cash, but it can be issued for consideration other than cash.
When any asset is acquired by a company, the payment of purchase price may be made by the issue of shares or in cash to the vendor. When shares are issued against the purchase price, it is called 'Issue of shares for consideration other than cash'. In other words cash is not received by the company against such shares.
Question 4
1 / -0

A company issued shares at Rs. 100. Company received Rs. 60 per share Rs. 60 is________.

A
Subscribed capital

B
Paid up capital

C
Called up capital

D
None of the above
Question 5
1 / -0

Prospectus is_____.

A
Invitation from company to subscribe for shares

B
Document submitted to ROC after allotment of shares

C
Document which shows the number of shares that have been allotted

D
Document which shows the paid up capital of the company

Solution

A share issuance requires issuing a prospectus, receiving application of shares, A prospectus is a document used by a public company as an open invitation to but when applications are less than expected, there is an under-subscription.
Question 6
1 / -0

The maximum amount beyond which a company is not allowed to raise funds by issue of its shares. is called ______________.

A
Subscribed capital

B
Called-up capital

C
Paid-up capital

D
Authorised capital

Solution

The maximum amount of share capital a company is allowed to raise is called its authorised capital. Though this does not limit the number of shares a company may issue, it does put a ceiling on the total amount of money that can be raised by the sale of those shares.
Question 7
1 / -0

Amongst the following that is not short term means of raising capital_____.

A
Loans from financial institutions

B
Bills of exchange

C
Promissory note

D
None of the above

Solution

Bill of exchange/promissory notes are meant for short term purpose around 1-6 month. But loan from financial institution is taken for longer term around 5-20 years.
Question 8
1 / -0

Features of calls-in-advance_____.

A
Considered as capital of the company

B
Shown on the liabilities side

C
No dividend pain on calls in advance

D
Both B & C

Solution

The Money received by the company in excess of what has been called up is known as “CALLS IN ADVANCE”. A Company may, if authorized by its Articles, accept calls in advance from its shareholders. A company may pay interest on such amount received in advance at the rate of 6% p.a. No dividend is payable on this amount.
Question 9
1 / -0

Which of the following statement is correct for preference shares?

A
They have voting rights

B
Their rights and given in memo-condom of association

C
They can vote at the time of winding up of the company

D
All the above

Solution

Preference share can vote on resolution, if such resolution affecting its right. Winding up is one of the reason which affect the right of preference share. So preference shareholder can vote on its resolution.
Question 10
1 / -0

________ is particularly useful for enterprises that are legally structured as non-profits and therefore cannot obtain equity capital.

A
Quasi-equity debt security

B
Loan security

C
Deemed security

D
All of the above

Solution

Quasi-equity debt security is a financial vehicle that combine the properties of equity and debt.It is technically a form of debt,but it has an important characteristics of equity investment.

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 47

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Accounting for share Capital Test - 47

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SHARING IS CARING

Question 1

Rs. 10,000

Rs. 8,000

Rs. 2,000

Rs. 18,000

Question 2

Capital reserve

Capital receipt

Capital revenue

All of the above

Question 3

For cash

For consideration other than cash

For both (a) and (b)

None of the above

Solution

Question 4

Subscribed capital

Paid up capital

Called up capital

None of the above

Question 5

Invitation from company to subscribe for shares

Document submitted to ROC after allotment of shares

Document which shows the number of shares that have been allotted

Document which shows the paid up capital of the company

Solution

Question 6

Subscribed capital

Called-up capital

Paid-up capital

Authorised capital

Solution

Question 7

Loans from financial institutions

Bills of exchange

Promissory note

None of the above

Solution

Question 8

Considered as capital of the company

Shown on the liabilities side

No dividend pain on calls in advance

Both B & C

Solution

Question 9

They have voting rights

Their rights and given in memo-condom of association

They can vote at the time of winding up of the company

All the above

Solution

Question 10

Quasi-equity debt security

Loan security

Deemed security

All of the above

Solution

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