Deck 20: Share Capital and Shareholders in a Company

Question 1

Which shareholders are returned their capital after some specified time :

A)Redeemable Preference Shares
B)Irredeemable Preference Shares
C)Cumulative Preference Shares
D)Participating Preference Shares

Answer 1

Redeemable Preference Shares

Question 2

The following statements apply to equity/preference shareholders. Which one of them applies only to preference shareholders?

A)Shareholders risk the loss of investment
B)Shareholders bear the risk of no dividends in the event of losses
C)Shareholders usually have the right to vote
D)Dividends are usually given at a set amount in every' financial year.

Answer 2

Dividends are usually given at a set amount in every' financial year.

Question 3

Unless otherwise stated, a preference share is always deemed to be :

A)Cumulative, participating and non-convertible
B)Non-cumulative, non-participating and non-convertible
C)Cumulative, non-participating and non-convertible
D)Non-cumulative, participating and non-convertible

Answer 3

Cumulative, non-participating and non-convertible

Question 4

The portion of the capital which can be called-up only on the winding up of the Company is called

A)Authorised Capital
B)Called up Capital
C)Uncalled Capital
D)Reserve Capital

Question 5

Capital included in the Total of Balance Sheet of a Company is called :

A)Issued Capital
B)Subscribed Capital
C)Called up Capital
D)Authorised Capital

Question 6

Reserve Capital is also known by :

A)Capital Reserve
B)Called up Capital
C)Subscribed Capital
D)None of the above

Question 7

In the Balance Sheet of a company, under the heading share capital, at the last is shown :

A)Authorised Share Capital
B)Subscribed Share Capital
C)Issued Share Capital
D)Reserve Share Capital

Question 8

Reserve Capital is a part of:

A)Paid-up Capital
B)Forfeited Share Capital
C)Assets
D)Capital to be called up only on liquidation of company

Question 9

Which of the following statements is true? (C.S. Foundation, Dec. 2012)

A)Authorised Capital = Issued Capital
B)Authorised Capital > Issued Capital
C)Paid up Capital > Issued Capital
D)None of the above

Question 10

In case of private placement of shares, to raise the amount of capital a company :

A)invites the public through prospectus
B)does not invite the public
C)invites the public through advertisement
D)invites the public through memorandum of association

Question 11

Shares issued by a company to its employees or directors in consideration of 'Intellectual Property Rights' are called :

A)Right Equity Shares
B)Private Equity Shares
C)Sweat Equity Shares
D)Bonus Equity Shares

Question 12

Public subscription of shares include :

A)To Issue Prospectus
B)To Receive Applications
C)To Make Allotment
D)All of the Above

Question 13

Issue of shares at a price lower than its face value is called :

A)Issue at a Loss
B)Issue at a Profit
C)Issue at a Discount
D)Issue at a Premium

Question 14

Persons who start a company are called ……………….

A)Shareholders
B)Directors
C)Promoters
D)Auditors

Question 15

Share Application Account is in the nature of:

A)Real Account
B)Personal Account
C)Nominal Account
D)None of the above

Question 16

If vendors are issued fully paid shares of 1,25,000 in consideration of net assets of ?1,50,000, the balance of 25,000 will be credited to :

A)Statement of Profit & Loss
B)Goodwill Account
C)Security Premium Reserve Account
D)Capital Reserve Account

Question 17

Premium on the issue of shares should be shown :

A)On the Assets side of balance sheet
B)On the Equity & Liabilities side of balance sheet
C)In profit & loss Statement
D)None of the Above

Question 18

From which account, expenses on issue of shares will be written off first of all:

A)Statement of Profit and Loss
B)Miscellaneous Expenditure Account
C)Share Issue Expenses Account
D)Securities Premium Reserve Account

Question 19

Pro-rata allotment of shares is made when there is :

A)Under subscription
B)Oversubscription
C)Equal subscription
D)As and when desired by directors

Question 20

If applicants for 80,000 shares were allotted 60,000 shares on prorata basis, the shareholder who was allotted 1,200 shares must have applied for :

A)900 Shares
B)3,600 Shares
C)1,600 Shares
D)4,800 Shares

Question 21

If 500 shares of 10 issued at a premium of 1 on which 9 (including premium) have been called and 7 including premium have been paid are forfeited, the forfeiture account should be credited by :

A)3,000
B)3,500
C)4,000
D)4,500

Question 22

Discount allowed on re-issue of forfeited shares is debited to :

A)Share Capital A/c
B)Share forfeiture A/c
C)Statement of Profit & Loss
D)General Reserve A/c

Question 23

The balance of the forfeited shares account after re-issue of forfeited shares is transferred to :

A)Statement of Profit & Loss
B)Share Capital A/c
C)Capital Reserve A/c
D)General Reserve A/c

Question 24

Madhu Ltd. forfeited 800 shares of `10 each issued at 10% premium to Shyam (` 9 called up) on which he did not pay ` 3 of allotment (including premium) and first call of `2. Out of these, 600 shares were re-issued to Ram as fully paid up for `9 per share. What is to amount to be transferred to capital Reserve?

A)`2,400
B)` 1,800
C)`3,000
D)`3,600

Question 25

Debenture holders are :

A)Owners of the Company
B)Debtors of the Company
C)Creditors of the Company
D)Promoters of the Company