Test: Company Accounts Issue Of Shares - 2


20 Questions MCQ Test Crash Course of Accountancy - Class 12 | Test: Company Accounts Issue Of Shares - 2


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QUESTION: 1

______ Shares are not convertible.

Solution:

Equity Shares are not convertible. Preference shares can be converted into equity shares depend upon the terms and conditions.

QUESTION: 2

Which type of capital will take place after the authorized 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: 3

When a company makes an offer or invites the public in general to subscribe its shares, it is known as _______

Solution:

When a company makes an offer or invites the public in general to subscribe its shares, it is known as Initial public offer (IPO).

QUESTION: 4

_______ is shown by way of deduction from subscribed capital while preparing notes to account.

Solution:

Calls in arrears is shown by way of deduction from subscribed capital while preparing notes to account. At the time of preparation of Balance Sheet of a company, while ascertaining the amount of share capital by preparing notes to accounts, the amount of calls in arrears should be deducted from the subscribed capital (subscribed but not fully paid up).

QUESTION: 5

The capital which is part of the uncalled capital of the company which can be called up only in the event of its winding up it is called

Solution:

Reserve Capital: It is uncalled capital which can be called up by the company in case of an emergency i.e. winding up. It is a part of Authorized Capital.

QUESTION: 6

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

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: 7

Authorized share capital is also known as:

Solution:

Authorised capital is also known as nominal capital. It refers to that amount which is stated in the Memorandum of Association.

QUESTION: 8

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

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: 9

Which of the following statement is false

Solution:

The Statement given as ‘Company is managed by all the members’ is not correct because it is not mandatory for all the members to run the company.

QUESTION: 10

Vinod Limited invited applications for subscription of 10,000 Equity shares @ Rs.10 each. Applications were received for 25,000 shares. This situation is called

Solution:

When a company receives excess applications i.e. more applications than the shares offered for subscription, is called oversubscription of shares.

QUESTION: 11

Which of the following is not a situation of oversubscription or not concerned with over subscription?

Solution:

Situations at the time oversubscriptions are:
1.Rejecting Excess Applications
2.Pro-rata allotment
3.Both Rejecting some applications and pro-rata allotment to remaining applicants
Note: Under subscription is a different situation, it is not concerned with over subscription

QUESTION: 12

What type of shares can be issued at discount?

Solution:

As per the Companies Act, 2013, A company cannot issue its shares at discount except sweat equity shares.

QUESTION: 13

Find out the amount of second & final call When a company issue its shares @ 10 each at a premium of 30%. Payable on Application Rs.4. On Allotment Rs.4. On First Call Rs.2.

Solution:

Total amount should be 10 + 30% i.e. 10 + 3 = 13
On Application Rs.4
On Allotment Rs.4
On First call Rs.2
Second & final call Rs.3

QUESTION: 14

A company can sell its shares only through___

Solution:

A company can sell its shares only through stock exchange. Company should be listed in the stock exchange to sell its shares.

QUESTION: 15

__________ Shareholders have voting rights in all circumstances.

Solution:

Equity Shareholders have voting rights in all circumstances. Preference shareholders have voting rights only in special situations.

QUESTION: 16

If buy back is made from free resources then what should be created __________

Solution:
QUESTION: 17

Stages of Incorporation of company are 
a.Promotion
b.Capital subscription
c.Incorporation
d.Commencement of business
Arrange them in order

Solution:

The Correct order is:
(a) Promotion
(b) Incorporation
(c) Capital Subscription
(d) Commencement of business

QUESTION: 18

Amount of Calls in Arrears will be deducted from______ under share capital.

Solution:

The amount of Calls in Arrears should be deducted from Subscribe but not fully paid up under share capital, while preparing notes to accounts for share capital.

QUESTION: 19

Share capital is shown in the balance sheet under the heading of _______

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.

QUESTION: 20

The amount of capital that a company can issue at par value is called

Solution:

The maximum amount of share capital a company is allowed to raise is called its authorized capital.

The company must specify the total amount of equity it wants to raise and the base value of its shares, called the par value.

 For example, if a company obtains authorization to raise $5 million and its stock has a par value of $1, it may issue and sell up to 5 million shares of stock.