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B Com Exam  >  B Com Tests  >  Advanced Corporate Accounting  >  Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - B Com MCQ

Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - B Com MCQ


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10 Questions MCQ Test Advanced Corporate Accounting - Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4

Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 for B Com 2024 is part of Advanced Corporate Accounting preparation. The Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 questions and answers have been prepared according to the B Com exam syllabus.The Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 below.
Solutions of Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 questions in English are available as part of our Advanced Corporate Accounting for B Com & Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 solutions in Hindi for Advanced Corporate Accounting course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Advanced Corporate Accounting for B Com Exam | Download free PDF with solutions
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 1
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What is the purpose of issuing bonus shares?

Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 1
Issuing bonus shares increases the share capital without affecting the reserves. The reserves are used to capitalize the bonus shares, resulting in a higher number of shares held by shareholders.
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 2
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Which type of shares does not carry the right to get additional dividend?

Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 2
Non-participating preference shares carry only a fixed rate of dividend without the right to receive additional dividends, even if there are surplus profits.
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Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 3
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What is the main purpose of creating a Capital Redemption Reserve account?

Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 3
The Capital Redemption Reserve account protects creditors' interests and maintains working capital by setting aside an amount equal to the redemption of preference shares.
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 4
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Which condition must be met for redeeming preference shares as per the Companies Act, 1956?
Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 4
As per the Companies Act, 1956, redeemable preference shares must be fully paid up before redemption.
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 5
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What is the effect of issuing bonus shares on shareholder dividends?
Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 5
Issuing bonus shares doesn't affect reserves, so dividends remain unchanged despite the increased share capital.
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 6
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What is the significance of issuing redeemable preference shares?
Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 6
Redeemable preference shares assure preference shareholders of a fixed dividend, which makes them an attractive source of capital for the company.
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 7
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How can the company utilize the Capital Redemption Reserve account?
Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 7
The Capital Redemption Reserve account can be used to issue fully paid bonus shares to shareholders.
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 8
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What is the impact of redeeming preference shares on creditors and working capital?
Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 8
Redeeming preference shares can affect working capital negatively and harm creditors' interests. The Capital Redemption Reserve account helps mitigate these effects.
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 9
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What is the primary purpose of issuing bonus shares to shareholders?
Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 9
Issuing bonus shares increases the number of outstanding shares while keeping the company's reserves unchanged.
Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 10
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Which type of preference shares carries the right to participate in surplus profits?
Detailed Solution for Test: Test: Issue Of Shares, Debentures, Underwriting And Bonus Shares- 4 - Question 10
Participating preference shares have the right to receive additional dividend from surplus profits after equity shareholders are paid.
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