Accounting for share Capital Test

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Accounting for share Capital Test - 2

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following is not true about a private company?

A
Minimum paid up capital is 5,00,000

B
Restriction on the right to transfer its shares

C
Private company ends with the words ‘Private Limited’.

D
Minimum paid up share capital Rs.1,00,000

Solution

Minimum paid up capital of a private company is 1,00,000. A private company cannot transfer its shares and all private companies’ ends with the words ‘Private Limited’.
Question 2
1 / -0

Following Entry takes place when:

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

A
Application money is adjusted

B
Application money is refunded

C
Both Application money is adjusted and Application money is refunded

D
Application money is received

Solution

Bank account is debited because money comes in the company and share application account is credited, it is a temporary account opened to know how many applications received.
Question 3
1 / -0

Share Application A/c and Share Allotment A/c is:

A
Personal Account

B
Nominal Account

C
Real Account

D
Fictitious Account

Solution

Share Application Account and Share Allotment Account is personal account.

As the share is capital for business received by the owner of business or any other person. So the person investing in the business in The form of share is giver. Rule of Personal A/c : "Debit the receiver, credit the giver" is applicable.
Question 4
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Which of the following statement is not true?

A
Sweat Equity shares can be issued at discount

B
Shares can be issued at discount

C
There is no limit for securities premium

D
Company can buy its own shares

Solution

A company cannot issue its shares at discount.It can only issue shares at par and premium.
Question 5
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Authorized share capital is also known as:

A
Called up capital

B
Paid up capital

C
Nominal Capital

D
Issued capital

Solution

Authorised capital is also known as nominal capital. It refers to that amount which is stated in the Memorandum of Association.
Question 6
1 / -0

Share Capital Account should be debited (at the time of forfeiture) with:

A
Called up amount

B
Face Value

C
Premium Amount

D
Paid up amount

Solution

At the time of forfeiture of shares, share capital account should be debited with the called up amount and not with the face value or paid up amount etc.(i.e. number of shares forfeited x called up amount per share)
Question 7
1 / -0

Which type of capital will take place after the authorized capital?

A
Issued Capital

B
Called up Capital

C
Paid up Capital

D
Subscribed Capital

Solution

Types of capital in order:

(a) Authorized Capital

(b) Issued Capital

(c) Subscribed Capital

(d) Called up capital

(e) Paid up capital
Question 8
1 / -0

When the entire face value of a share is called by the company and is also paid by the shareholder, It is known as ______________

A
Reserve Capital

B
Subscribed and fully paid up capital

C
Capital Reserve

D
Subscribed but not fully paid up capital

Solution

When the entire face value of a share is called by the company and is also paid by the shareholder, It is known as Subscribed and fully paid up capital.
Question 9
1 / -0

What is the limit of Securities Premium on the issue of shares?

A
6%

B
Unlimited

C
20%

D
10%

Solution

There is no limit of securities premium on issue of shares. Share of a company whose face value is Rs.10 can be issued at a price of 300 Rupees (including premium 290).
Question 10
1 / -0

For which of the following purpose, securities premium reserve cannot be used?

A
Issuing fully paid bonus shares to the shareholders

B
Working capital

C
Writing off preliminary expenses

D
Buy back of shares

Solution

A company cannot use securities premium reserve as working capital. It can use securities premium for the following purpose:

• Writing off preliminary expenses

• Issuing fully paid bonus shares to the shareholders

• Buy back of shares

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Re-Attempt Weekly Quiz Competition

Accounting for share Capital Test - 2

Result

Accounting for share Capital Test - 2

Score

-

Rank

-

SHARING IS CARING

Question 1

Minimum paid up capital is 5,00,000

Restriction on the right to transfer its shares

Private company ends with the words ‘Private Limited’.

Minimum paid up share capital Rs.1,00,000

Solution

Question 2

Application money is adjusted

Application money is refunded

Both Application money is adjusted and Application money is refunded

Application money is received

Solution

Question 3

Personal Account

Nominal Account

Real Account

Fictitious Account

Solution

Question 4

Sweat Equity shares can be issued at discount

Shares can be issued at discount

There is no limit for securities premium

Company can buy its own shares

Solution

Question 5

Called up capital

Paid up capital

Nominal Capital

Issued capital

Solution

Question 6

Called up amount

Face Value

Premium Amount

Paid up amount

Solution

Question 7

Issued Capital

Called up Capital

Paid up Capital

Subscribed Capital

Solution

Question 8

Reserve Capital

Subscribed and fully paid up capital

Capital Reserve

Subscribed but not fully paid up capital

Solution

Question 9

6%

Unlimited

20%

10%

Solution

Question 10

Issuing fully paid bonus shares to the shareholders

Working capital

Writing off preliminary expenses

Buy back of shares

Solution

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