Accounting for share Capital Test

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Accounting for share Capital Test - 70

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Weekly Quiz Competition

Question 1
1 / -0

__________ Shareholders have voting rights in all circumstances.

A
Equity Share

B
Bonus Share

C
Preference Share

D
Both Preference Share and Bonus Share

Solution

Equity Shareholders have voting rights in all circumstances. Preference shareholders have voting rights only in special situations.
Question 2
1 / -0

Entry for reissue of forfeited shares at discount will be

A

Bank A/c Dr.
Share Forfeiture A/c Dr.
To Share Capital A/c

B

Bank A/c Dr.
Share Capital A/c Dr.
To Share Forfeited A/c

C

Share Capital A/c Dr.
Share Forfeited A/c Dr.
To Bank A/c

D

Bank A/c Dr.
To Share Capital A/c

Solution

Bank account is debited with the amount received on reissue. Share capital is credited with face value of shares reissued and share forfeiture account is debited with the amount of loss on reissue.
Question 3
1 / -0

What is paid to the Shareholders?

A
Interest

B
Salary

C
Dividend

D
Debentures

Solution

Dividend is paid to the shareholders.

Interest is paid to the Debenture holders
Question 4
1 / -0

How will you calculate the number of shares to be issued to the Vendor?

A
Purchase Consideration/ Called up capital

B
Purchase Consideration/ Face value of share

C
Purchase Consideration/ Premium on share

D
Purchase Consideration/ Issue Price of share

Solution

When a company buy fixed assets or a running business and make payment through equity shares in such a case number of shares to be issued to the vendor should be calculated as follows:

Purchase Consideration/ Issue Price of share
Question 5
1 / -0

As per the Companies Act, 2013, companies cannot issue ______________

A
Bonus Shares

B
Preference Shares

C
Equity Shares

D
Irredeemable Preference Shares

Solution

There are two types of preference shares in context to the redemption i.e. Redeemable and Non-redeemable preference shares. As per the Companies Act, 2013, companies cannot issue Irredeemable Preference Shares. Redeemable preference shares are those which can be redeemed by the company.
Question 6
1 / -0

What is the correct order of the following items?
•Authorised Capital
•Subscribed but not fully paid-up
•Issued Capital
•Subscribed and Fully paid-up

A

•Authorised Capital
•Issued Capital
•Subscribed but not fully paid-up
•Subscribed and Fully paid-up

B

•Authorised Capital
•Subscribed but not fully paid-up
•Issued Capital
•Subscribed and Fully paid-up

C

•Authorised Capital
•Issued Capital
•Subscribed and Fully paid-up
•Subscribed but not fully paid-up

D

•Issued Capital
•Authorised Capital
•Subscribed and Fully paid-up
•Subscribed but not fully paid-up

Solution

Correct order of Share Capital is:

•Authorised Capital- it is the total amount of capital that the company is authorised to issue during its lifetime.
•Issued Capital- it is that part of authorised capital that has been issued or offered by company for public subscription.
•Subscribed and Fully paid-up- it is that part of issued capital which has been subscribed by public and fully called up by company and paid up by public.
•Subscribed but not fully paid-up- it is that part of issued capital which is subscribed by public by either not fully called up by company or not fully paid up by some of the shareholders and there are calls in arrears.
Question 7
1 / -0

Excess money received on application should be utilized first on:

A
Allotment

B
Premium

C
Calls only

D
Half on Allotment and Half on Calls

Solution

If a company receives any excess amount on application and pro-rata allotment is made to such applicants, in such a case, excess money received should be adjusted on the allotment first.
Question 8
1 / -0

In case of a public company, it must have at least _____ Directors.

A
5

B
7

C
3

D
2

Solution

A Public company should have at least 3 Directors and a private company must have at least 2 Directors.
Question 9
1 / -0

Which of the following represents the excess of issued price over the nominal value of shares?

A
Premium on issue of share

B
Share Capital

C
Profit of the company

D
Discount on issue of share

Solution

When a company issues its shares at a price which is more than the actual face value, it is known as shares issued at premium.
Question 10
1 / -0

Share capital is shown in the balance sheet under the heading of_______

A
Non-current liabilities

B
Reserves and Surplus

C
Non-current Assets

D
Shareholders’ Funds

Solution

Share capital is shown in the balance sheet under the heading of Shareholders’ Funds because share capital is that amount of capital which is contributed by the shareholders.

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 70

Result

Accounting for share Capital Test - 70

Score

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Rank

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SHARING IS CARING

Question 1

Equity Share

Bonus Share

Preference Share

Both Preference Share and Bonus Share

Solution

Question 2

Bank A/c Dr. Share Forfeiture A/c Dr. To Share Capital A/c

Bank A/c Dr. Share Capital A/c Dr. To Share Forfeited A/c

Share Capital A/c Dr. Share Forfeited A/c Dr. To Bank A/c

Bank A/c Dr. To Share Capital A/c

Solution

Question 3

Interest

Salary

Dividend

Debentures

Solution

Question 4

Purchase Consideration/ Called up capital

Purchase Consideration/ Face value of share

Purchase Consideration/ Premium on share

Purchase Consideration/ Issue Price of share

Solution

Question 5

Bonus Shares

Preference Shares

Equity Shares

Irredeemable Preference Shares

Solution

Question 6

•Authorised Capital •Issued Capital •Subscribed but not fully paid-up •Subscribed and Fully paid-up

•Authorised Capital •Subscribed but not fully paid-up •Issued Capital •Subscribed and Fully paid-up

•Authorised Capital •Issued Capital •Subscribed and Fully paid-up •Subscribed but not fully paid-up

•Issued Capital •Authorised Capital •Subscribed and Fully paid-up •Subscribed but not fully paid-up

Solution

Question 7

Allotment

Premium

Calls only

Half on Allotment and Half on Calls

Solution

Question 8

5

7

3

2

Solution

Question 9

Premium on issue of share

Share Capital

Profit of the company

Discount on issue of share

Solution

Question 10

Non-current liabilities

Reserves and Surplus

Non-current Assets

Shareholders’ Funds

Solution

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Bank A/c Dr.
Share Forfeiture A/c Dr.
To Share Capital A/c

Bank A/c Dr.
Share Capital A/c Dr.
To Share Forfeited A/c

Share Capital A/c Dr.
Share Forfeited A/c Dr.
To Bank A/c

Bank A/c Dr.
To Share Capital A/c

•Authorised Capital
•Issued Capital
•Subscribed but not fully paid-up
•Subscribed and Fully paid-up

•Authorised Capital
•Subscribed but not fully paid-up
•Issued Capital
•Subscribed and Fully paid-up

•Authorised Capital
•Issued Capital
•Subscribed and Fully paid-up
•Subscribed but not fully paid-up

•Issued Capital
•Authorised Capital
•Subscribed and Fully paid-up
•Subscribed but not fully paid-up