Accounting for share Capital Test

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Accounting for share Capital Test - 51

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Question 1
1 / -0

Participating Preference Shares is one which carries __________________.

A
A right to receive arrears of dividend

B
A rights to participate in the surplus profits and surplus assets

C
A right to participate in the surplus profits or surplus assets or both

D
A right to conversion into equity share

Solution

Ordinary shareholders are entitled to participate in the surplus profits or assets of the company which remain after repayment of capital. Preference shareholders have no right to participate in surplus profits unless the right to participate in surplus profits is expressly set out in the articles.
Question 2
1 / -0

Issued 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 allotted.

D
Nominal value of all shares offered to public

Solution

The issue capital refers to the nominal, or face, value of the shares rather than their actual value.The directors of a company can increase its issued capital by issuing more shares within the powers specified in the company's articles of association.
Question 3
1 / -0

Subscribed 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 allotted.

D
Paid up value of all shares offered to public.

Solution

subscribed capital by the issue of further shares, such shares shall be offered company in proportion, as nearly as circumstances admit, to the paid-up share capital and the notice referred to in clause (i) shall contain a statement of this right; amount of the value of shares which such debentures or loans or part thereof .
Question 4
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Reserve Capital refers to __________________.

A
Capital reserve

B
That portion of called up share capital which shall not be capable of being called up except in the event and for the purposes of the company being wound up.

C
That portion of uncalled share capital which can be called up at any time before the company is being wound up.

D
None of the above.

Solution

Capital Reserve means the part of profit reserved by the company for a particular purpose such as to finance long-term projects or to write off capital expenses.Reserve Capital shows the part of the authorized capital that has not yet called up by the company and is available for drawing, if necessary.
Question 5
1 / -0

Under the Capital Clause of the Memorandum of Association of the Company, it is must to state ________________________.

A
The division of share capital into shares of fixed amount.

B
The division of the authorized capital into different classes of shares.

C
The rights of various classes of shareholders

D
None of these

Solution

An important step in the formation of a company is to prepare a document the company to be pursued by the company on its incorporation and objects company, the memorandum shall also state the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount.
Question 6
1 / -0

Equity Shares can be issued ___________________.

A
With proportionate voting rights only

B
With differential voting rights only

C
With differential right as to dividend and voting

D
None of these

Solution

The issue of shares is done by the company to raise capital. they receive a payment of higher dividends and appreciation in the market value of the shares. Equity Share Capital may be with the voting rights or with the differential rights . Usually, a company does not call the full amount at once from the shareholders.
Question 7
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Uncalled capital refers to ____________________.

A
That portion of subscribed capital which has not yet been called up by the company

B
That portion of unissued capital which has not yet been called up by the company.

C
That portion of authorized capital which has not yet been issued.

D
Reserve capital only.

E
None of the above

Solution

Share capital refers to the amount of funding a company raises on the sale does not contribute to the issuing company's share capital. Any funds due for shares issued but not fully paid for are called-up share capital.
Question 8
1 / -0

The issue price of a share can be demanded ________________.

A
only on application

B
only on allotment

C
only on call

D
in lumpsum or installments on application & /or allotment &/or call

Solution

Shares are said to be issued at par when the issue price is equal to the face value. When the sharesare issued, the company may ask the payment of the shares either in one lump sum or in installments. then no shares can be allotted and the application money has to be returned to Such demands are termed as calls.
Question 9
1 / -0

Securities Premium can be demanded ________________.

A
only on application

B
only on allotment

C
only on call

D
in lumpsum or installments on application &/or allotment &/or call

Solution

Securities Premium Reserve may be demanded by company on application, allotment or calls. It is due to the reason that at the time of receiving the application money it is treated as deposit and the company is not certain whether the amount received would be accepted or rejected.
Question 10
1 / -0

If some shares are issued to a vendor who supplied a fixed asset, these shares are ____________________.

A
not required to be disclosed.

B
required to be disclosed separately under sub-head issued capital.

C
required to be disclosed separately under sub-head authorised capital.

D
None of these.

Solution

In case of dissolution of partnership firm, the firm ceases to exist, the assets of the on the date of death of a partner the partnership deed provided for the following: company paid the vendors by issue of some equity shares and debentures To Fixed Assets Account.

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 51

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Accounting for share Capital Test - 51

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SHARING IS CARING

Question 1

A right to receive arrears of dividend

A rights to participate in the surplus profits and surplus assets

A right to participate in the surplus profits or surplus assets or both

A right to conversion into equity share

Solution

Question 2

Paid up value of all shares allotted.

Called up value of all shares allotted.

Nominal value of all shares allotted.

Nominal value of all shares offered to public

Solution

Question 3

Paid up value of all shares allotted.

Called up value of all shares allotted.

Nominal value of all shares allotted.

Paid up value of all shares offered to public.

Solution

Question 4

Capital reserve

That portion of called up share capital which shall not be capable of being called up except in the event and for the purposes of the company being wound up.

That portion of uncalled share capital which can be called up at any time before the company is being wound up.

None of the above.

Solution

Question 5

The division of share capital into shares of fixed amount.

The division of the authorized capital into different classes of shares.

The rights of various classes of shareholders

None of these

Solution

Question 6

With proportionate voting rights only

With differential voting rights only

With differential right as to dividend and voting

None of these

Solution

Question 7

That portion of subscribed capital which has not yet been called up by the company

That portion of unissued capital which has not yet been called up by the company.

That portion of authorized capital which has not yet been issued.

Reserve capital only.

None of the above

Solution

Question 8

only on application

only on allotment

only on call

in lumpsum or installments on application & /or allotment &/or call

Solution

Question 9

only on application

only on allotment

only on call

in lumpsum or installments on application &/or allotment &/or call

Solution

Question 10

not required to be disclosed.

required to be disclosed separately under sub-head issued capital.

required to be disclosed separately under sub-head authorised capital.

None of these.

Solution

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