Accounting for share Capital Test

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Accounting for share Capital Test - 50

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Weekly Quiz Competition

Question 1
1 / -0

An authorized capital refers to __________________.

A
Paid up value of all shares allotted

B
Called up value of all shares allotted

C
Nominal value of all shares offered to public.

D
That amount which is stated in the capital clause of the Memorandum of Association as the Share Capital

Solution

Authorised or registered capital means the sum mentioned in the capital clause of Memorandum of Association. It is the maximum amount which the company raise by issuing the shares and on which the registration fee is paid. This limit is cannot be exceeded unless the Memorandum of Association is altered.
Question 2
1 / -0

Free transferability of share is the characteristic of the company. It is possessed by __________________.

A
All companies

B
All private companies

C
All public companies

D
None of these

Solution

Transferability is an important feature of a share in a company imposed by the articles, a shareholder is free to transfer shares to a person of his own . “When joint stock companiesare established, the great object was that the may be transferred by delivery of possession, but as per section 36.
Question 3
1 / -0

A member can not be held liable for the acts of the company even if he holds virtually the entire share capital. This is related to:

A
An artificial person created by law

B
Separate Legal Entity

C
Perpetual Existence

D
Common Seal

Solution

A shareholder cannot be held liable for the acts of the company even if he holds virtually the entire share capital. The shareholders are not the agents of the company and so they cannot bind it by their acts.
Question 4
1 / -0

Select the correct answer from the possible choices given below:
A __________ is indivisible unit of share capital.

A
Debenture

B
Share

C
Bond

D
None of above.
Question 5
1 / -0

A company is an association registered under _______________.

A
The Co-operative Societies Act

B
The Societies Registration Act

C
The Indian Partnership Act

D
The Companies Act

Solution

A registered company can exercise all functions of a company incorporated under the Act. Also, a binding contract comes into existence between the company and its members as mentioned in the Memorandum and Articles of Association.
Question 6
1 / -0

A company has a separate legal entity from _____________.

A
Its employees

B
Its directors

C
Its creditors

D
Its members

Solution

A company is a separate legal entity as distinct from its members, therefore it is separate at law from its shareholders , directors , promoters etc and as such isconferred with rights and is subject to certain duties and obligations.
Question 7
1 / -0

Common Seal means the official signature of ________________.

A
The Company

B
The Directors

C
The Members

D
The Employees

Solution

It is the signature of the company to any document on which It is affixed and binds the company for all obligations undertaken in the document. In other words,Common Seal is the official signature of the company and each company shall have only one seal, on its incorporation.
Question 8
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A preference shares is one which carries _______________________.

A
A right to receive dividend at a stipulated rate or of a fixed amount only before any dividend is paid on equity shares

B
A right to receive repayment of capital only on winding up of the company before the capital of equity share holders is returned.

C
Both rights mentioned in (a) and (b)

D
None of these

Solution

Preference shares are company stock with dividends that are paid to stockholders are entitled to be paid from company assets before shareholders with the right to be paid dividends in an amount equal to designed to be paid out only if the amount of dividends received by Fixed Income Essentials .
Question 9
1 / -0

X Ltd. was formed with a capital of Rs 10,00,000 divided into shares of Rs 10 each, It offered 90% shares called up 40% on application and 20% on allotment. The subscribers paid Rs 3,40,000 on application and Rs 1,69,000 on allotment. The subscribed capital is ___________.

A
Rs 10,00,000

B
Rs 5,10,000

C
Rs 5,09,000

D
Rs 3,40,000

Solution

Authorized capital 1,00,00,000
Issued captal 8,50,000
Unissued capital 1,50,000
subscribed capital 5,09,000
called up capital 5,10,000
Uncalled up capital 3,40,000
paid up capital 5,09,000
call in arrears 1,000.
Question 10
1 / -0

Cumulative Preference Share is one on which __________________.

A
Arrears of dividend accumulate

B
Arrears of dividend do not accumulate

C
Arrears of redeemable share capital accumulate

D
None of these

Solution

Cumulative Preference Share:- A Cumulative Preference Share:- A preference share is said to be cumulative when the arrears of dividend are accumulate and such arrears are paid before paying any dividend to equity shareholders.

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 50

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Accounting for share Capital Test - 50

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SHARING IS CARING

Question 1

Paid up value of all shares allotted

Called up value of all shares allotted

Nominal value of all shares offered to public.

That amount which is stated in the capital clause of the Memorandum of Association as the Share Capital

Solution

Question 2

All companies

All private companies

All public companies

None of these

Solution

Question 3

An artificial person created by law

Separate Legal Entity

Perpetual Existence

Common Seal

Solution

Question 4

Debenture

Share

Bond

None of above.

Question 5

The Co-operative Societies Act

The Societies Registration Act

The Indian Partnership Act

The Companies Act

Solution

Question 6

Its employees

Its directors

Its creditors

Its members

Solution

Question 7

The Company

The Directors

The Members

The Employees

Solution

Question 8

A right to receive dividend at a stipulated rate or of a fixed amount only before any dividend is paid on equity shares

A right to receive repayment of capital only on winding up of the company before the capital of equity share holders is returned.

Both rights mentioned in (a) and (b)

None of these

Solution

Question 9

Rs 10,00,000

Rs 5,10,000

Rs 5,09,000

Rs 3,40,000

Solution

Question 10

Arrears of dividend accumulate

Arrears of dividend do not accumulate

Arrears of redeemable share capital accumulate

None of these

Solution

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