CBSE Class 12 Accountancy Accounting for Share Capital Advanced Questions

Question. Minimum number of members in a Public Company
a) 2
b) 7
c) 5
d) 3

Answer : B

Question. The portion of the authorised capital which can be called-up only on the liquidation of the company is called
a) Authorised capita
b) Reserve capital
c) Issued capital
d) Called up capital

Answer : B

Question. XY Limited issued 2,50,000 equity shares of Rs. 10 each at a premium of Rs.1 each payable as Rs.2.5 on application, Rs.4 on allotment and balance on the first and final call. Applications were received for 5,00,000 equity shares but the company allotted to them only 2,50,000 shares. Excess money was applied towards amount due on allotment. Last call on 500 shares was not received and shares were forfeited after due notice. This is a case of:
a) Over subscription
b) Pro-rata allotment
c) Forfeiture of Shares
d) All of the above

Answer : D

Question. When Second instalment paid
a) On allotment
b) On Application
c) Both
d) None of the options

Answer : A

Question. Deepak Ltd. offered for subscription 5,50,000 equity shares of Rs. 10 each.The public applied for 5,00,000 shares.
The call ( Rs. 8 per share) was received except from Gopal, who holds 4,000 shares has not paid after application money of Rs. 2 per share and from Shyam who holds 1,000 shares has paid only Rs. 6 per share. Gopal's shares were forfeited. The amount of subscribed capital to be disclosed in the Balance Sheet is
(a) Rs.39,96,000.
(b) Rs.39,74,000.
(C) Rs.49,46,000.
(d) Rs.49,74,000.

Answer : B

Question. Those companies whose shares are listed on a recognised stock exchange for public trading
a) Government Company
b) Listed Company
c) Private Company
d) Limited company

Answer : B

Question. If vendors are issued fully paid shares of Rs. 1,25,000 in consideration of net assets of Rs. 1,50,000, the balance of Rs.25,000 will be credited to :
a) Statement of Profit & Loss
b) Goodwill Account
c) Security Premium Reserve Account
d) Capital Reserve Account

Answer : C

Question. Reserve Capital is :
a) Subscribed Capital
b) Capital Reserve
c) Uncalled Capital
d) Part of the uncalled capital which may be called only at the time of liquidation of the Company

Answer : D

Question. A Company offered 50,000 shares of ?10 each at par payable as to ?3 on applications, ?5 on allotment and the balance on final call. Applications were received for 60,000 shares and the allotment was made pro-rata. The excess application money was to be adjusted on allotment and call. How much amount will be transferred from Share Application A/c to Share Allotment A/c?
a) ₹1,80,000
b) ₹30,000
c) ₹1,50,000
d) ₹50,000

Answer : B

Question. Issue of share at a discount
a) Section 79
b) Section 78
c) Section 76
d) None of the options

Answer : A

Question. Capital of a Company is divided in units which is called :
a) Debenture
b) Share
c) Stock
d) Bond

Answer : B

Question. Section 591of Act states this type of company is incorporated outside India but has established business in India, Called
a) Foreign Company
b) Government Company
c) Private company
d) Limited company

Answer : A

Question. If shares of Rs.4,00,000 are issued for purchase of assets of Rs.5,00,000, Rs. 1,00,000 will be treated as ................ :
a) Discount
b) Premium
c) Profit
d) Loss

Answer : B

Question. Which of the following statement in false
a) Bonus shares can be issued out revaluation profit.
b) Bonus issue is made out of free reserves or securities premium collected in cash only
c) No bonus issue shall be made within 12 months of any public or right issue.
d) Company can issue bonus shares in any ratio

Answer : A

Question. The shares on which there is no any pre-fixed rate of dividend is decided, but the rate of dividend is fluctuating every year according to the availability of profits, such share are called :
a) Equity Share
b) Non-cumulative preference share
c) Non-convertible preference share
d) Non-guaranteed preference share

Answer : A

Question. As per SEBI Guidelines, Application money should not be less than ……………. of the issue price of each share.
a) 10%
b) 15%
c) 25%
d) 50%

Answer : C

Question. A Company issued 50,000 shares of ₹20 each at 5% premium. ₹10 were payable on application and balance on allotment. What will be the allotment amount?
a) ₹5,00,000
b) ₹4,75,000
c) ₹5,50,000
d) ₹5,25,000

Answer : C

Question. Formed by special act of the legislature or parliament Called
a) Guarantee company
b) Statutory Company
c) Chartered companies
d) None of the options

Answer : B

Question. Issue of share at a discount must be authorised by a resolution passed by the company in general meeting and duly sanctioned by the
a) Central government.
b) State government.
c) Local government
d) None of the options

Answer : A

Question. Capital raised by issue of shares is called
a) Authorised Capital
b) Share capital.
c) Called up Capital
d) None of the options

Answer : B

Question. An artificial person created by Law is called :
a) Sole Tradership
b) Partnership Firm
c) Company
d) All of the Above

Answer : C

Question. 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

Answer : C

Question. Preference shares, in case the holders of these have a right to convert their preference shares into equity shares at their option according to the terms of issue, such shares are called :
a) Cumulative Preference Share
b) Non-cumulative Preference Share
c) Convertible Preference Share
d) Non-convertible Preference Share

Answer : C

Question. Minimum number of directors in Pvt. Ltd company
a) 2
b) 3
c) 4
d) No limit

Answer : A

Question. 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

Answer : B

Question. Reserve Capital is also known by :
a) Capital Reserve
b) Called up Capital
c) Subscribed Capital
d) None of the above

Answer : D

Question. What type of shares can be issued at discount?
a) Sweat Equity Shares
b) Equity Shares
c) Preference Shares
d) None of the options

Answer : A

Question. Maximum number of members in a private company is :
a) 7
b) 200
c) 20
d) No Limit

Answer : B

Question. Which of the following will define, when appropriation of a certain number of shares is made to an applicant in response to his application? (C.S. Foundation, Dec. 2012)
a) Share forfeiture
b) Share allotment
c) Share trading
d) Share Purchase

Answer : B

Question. A company is said to be Deemed Public company if its Annual Turnover exceeds
a) 25 Crores.
b) 20 Crore
c) 30 Crore
d) None of the options

Answer : A

Question. A Company is
a) Has separate legal identity
b) Has Perpetual existence
c) Has Common seal
d) All of the options

Answer : D

Question. When shares are forfeited. Share Capital Account is debited with
(a) nominal (face) value of shares.
(b) called-up share capital.
(c) paid-up value of shares.
(d) market value of shares.

Answer : B

Question. Which of the following will define, when appropriation of a certain number of shares is made to an applicant in response to his application?
a) Share forfeiture
b) Share allotment
c) Share trading
d) Share Purchase

Answer : B

Question. Shareholders are :
a) Customers of the Company
b) Owners of the Company
c) Creditors of the Company
d) None of these

Answer : B

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

Question. Balance in forfeited share account is shown in the balance sheet under the head of
a) Reserves and surplus
b) Share capital.
c) Current liabilities
d) None of the options

Answer : B

Question. Capital reserves are created from
a) Average Profit
b) Capital Profit
c) Share Profit
d) None of the options

Answer : B

Question. If a share of Rs. 100 on which Rs.60 has been paid, is forfeited, it can be re-issued at the minimum price of:
a) Rs. 60
b) Rs.100
c) Rs. 40
d) Rs.140

Answer : C

Question. A Company invited applications for 1,00,000 shares and it received applications for 1,50,000 shares. Applications for 30,000 shares were rejected and the remaining were allotted shares on prorata basis. How many shares an applicant for 3,000 shares will be allotted :
a) 2,500 Shares
b) 3,600 Shares
c) 4,500 Shares
d) 2,000 Shares

Answer : A

Question. A company purchased machinery for Rs. 1,80,000 and in consideration issued shares at 20% premium. What will be the face value of shares issued :
a) Rs. 1,44,000
b) Rs. 1,50,000
c) Rs. 1,80,000
d) Rs.2,16,000

Answer : B

Question. Authorised Capital of a Company is mentioned in :
a) Memorandum of Association
b) Articles of Association
c) Prospectus
d) Statement in lieu of Prospectus

Answer : A

Question. Share capital of a company can be divided into
a) All of the options
b) Authorised Capital
c) Issued Capital
d) Subscribed Capital

Answer : A

Question. Which company has special rights under Companies Act 3 (i) section (iii)
a) Private Company
b) Limited company
c) Illegal company
d) None of the options

Answer : A