CBSE Questions for Class 12 Commerce Accountancy Accounting For Share Capital Quiz 11 - MCQExams.com

Shares on which the company has called the entire nominal value and has also received it, is shown in the Notes to Accounts on share capital under subscribed capital as ________________.
  • Subscribed and fully paid
  • Subscribed but not fully paid
  • None of the above
  • Any of the above
Shares on which the final call is not received are shown in the Notes to Accounts on share capital under subscribed capital as ________________.
  • Subscribed and fully paid
  • Subscribed but not fully paid
  • None of the above
  • Any of the above
Shares are always issued at par.
  • True
  • False
Pro-rata allotment of shares means allotment of shares ________________.
  • Equally amongst the applicants
  • At the discretion of the directors
  • To all the applicants in proportion to the shares applied for
  • To only a few selected applicants
Interest on calls in arrears is charged according to Table A of Schedule I to the Companies Act 1956 at the rate of __________.
  • 5% p.a.
  • 6% p.a.
  • 12% p.a.
  • 10% p.a.
Every company has to file to the Register for incorporation a copy of its _____________..
  • Articles of Association
  • Prospectus
  • Memorandum of Association
  • All the above
Reduction of share capital permission of _____________.
  • Central Government
  • Court
  • SEBI
  • State Government
Deepthi, a shareholder holding $$800$$ shares of Rs.$$10$$ each, did not pay the allotment money of Rs. $$4$$ per share (including a premium of Rs. $$2$$) and the first and final call of Rs. $$3$$. Her shares were forfeited after the first and final call. Give journal entry for forfeiture of the shares.
  • Share Capital A/c ------------$$8,000$$

    Securities Premium A/c------$$1,600$$

    To Share Allotment A/c $$3,200$$

    To Share First call  A/c $$2,400$$

    To Share Forfeiture A/c $$4,000$$
  • Share Capital A/c -------------$$10,000$$

    Securities Premium A/c------$$1,600$$

    To Share Allotment A/c $$3,200$$

    To Share First call A/c $$2,400$$

    To Share Forfeiture A/c $$6,000$$
  • Share Capital A/c -------------$$8,000$$

    Securities Premium A/c-----$$2,600$$

    To Share Allotment A/c $$3,200$$

    To Share First call A/c $$2,400$$

    To Share Forfeiture A/c $$5,000$$
  • Share Capital A/c ------------- $$9,000$$

    Securities Premium A/c------$$1,600$$

    To Share Allotment A/c $$3,200$$

    To Share First call A/c $$1,400$$

    To Share Forfeiture A/c $$6,000$$
Journalise the given transaction in the books of Indian Oil Ltd, if $$400$$ shares of Rs.$$50$$ each issued at par were forfeited for non-payment of final call of Rs.$$10$$ per share. These shares were reissued at Rs. $$45$$ per share fully paid-up. Record the the journal entry for transferring the balance in forfeiture amount to capital reserve.
  • Debit Share Forfeiture A/c and Credit Capital Reserve A/c with Rs. $$14,000$$.
  • Debit Capital Reserve A/c and Credit Share Forfeiture A/c with Rs. $$16,000$$.
  • Debit Share Forfeiture A/c and Credit Capital Reserve A/c with Rs. $$16,000$$.
  • Debit Capital Reserve A/c and Credit Share Forfeiture A/c with Rs. $$14,000$$.
A bearer of a share warrant of a company is____________.
  • A creditor of the company
  • A member of the company
  • A member subject to certain conditions
  • Not a member of the company
If shares are issued at its face value, it is called as issue at ______.
  • Premium
  • Discount
  • Par
  • None of these
Unpaid calls are shown in the balance sheet of a company _______________.
  • By adding it to the share capital.
  • By deducting it from the called-up share capital.
  • Under the head, 'current assets'.
  • Under the head, 'current liabilities'.
Consider the following steps in the process of allotment of shares.
Issue of prospectus
Appointment of manager to the issue
Receipt of application money
Listing in a stock exchange 
Minimum subscription
The correct chronological sequence of these steps is :
  • 1, 2, 5, 4, 3
  • 2, 1, 3, 5, 4
  • 2, 1, 5, 3, 4
  • 1, 2, 4, 5, 3
Profit prior to incorporation is an example of ___________.
  • Revenue reserve
  • Capital reserve
  • Secret reserve
  • General reserve
Bonus Shares are issued by the companies because :
  • Surplus cash is available
  • There are heavy accumulated general reserves
  • There is heavy competition from similar companies
  • They have very high gross profit ratio
Which of the following companies may issue share warrants?
  • Companies limited by guarantee
  • Private limited companies
  • Public limited companies
  • All of the above
State with reasons, whether the following statements are True or False.
Transfer of share is initiated by the company.
  • True
  • False
In case of a company, ''Buy Back'' is related to ____________.
  • Prospectus
  • Shares
  • Debentures
  • Cheques
Security premium reserve in an example of.....................?
  • revenue reserve
  • Capital reserve
  • reserve capital
  • Revaluation reserve
When the stock market index is rising, a company may issue                   in order to meet its financial requirements.
  • Equity shares
  • Debentures
  • Bonds
  • None of the above
In India, dividend distribution tax is paid on:
  • Equity Share
  • Preference Share
  • Debenture
  • Both A and B
As per sec $$4(1)$$(e) of Companies Act $$2013$$, a company having a share capital, the memorandum of association must state the amount of ___________.
  • Authorised/ registered capital
  • Paid-up share capital
  • Called-up capital
  • Reserved capital
In order to calculate the proportion of equity financing used by the company, which of the following should be used?
  • Authorised Share Capital
  • Equity Share Capital plus Reserves and Surplus
  • Equity Share Capital plus Preference Share Capital
  • Equity Share Capital plus Long-term Debt
Conversion of physical shares into electronic securities is called ________.
  • Dematerialization
  • Price rigging
  • Rematerialization
  • None of these
'Call in arrear' is shown in the balance sheet on the liability side _______________.
  • by deducting the amount from the called up capital
  • under the heading 'Reserve and Surplus'
  • by deducting the amount from the capital reserve
  • by deducting the amount from the 'Share Forfeited Account'
Salary payable to the managing director of the company is treated as _________.
  • Unsecured debt
  • Preferential debt
  • Unsecured credits
  • Liquidation expenses
When an existing company is liquidated and a new company is formed with the same shareholders to take over its business, it is called __________.
  • Absorption
  • External reconstruction
  • Amalgamation
  • Internal reconstruction
Which one of the following financial institutions shall not be regarded as Public financial institutions as per section $$2(72)$$ of Companies Act $$2013$$?
  • LIC
  • IDFCL
  • Institutions notified by central government in consultation with RBI
  • KFC
In case of public company total managerial remuneration can't exceed ___________ per cent of the net profits.
  • $$5$$
  • $$7$$
  • $$11$$
  • $$12$$
Which one of the following is not a relaxation given to an OPC?
  • Need not prepare Cash Flow Statement
  • Annual report can be signed by Director
  • No need to hold AGM
  • No need to appoint Company Secretary
In case the shares have been issued at a premium and the amount of premium has been received, then at the time of forfeiture of such shares _______________________.
  • Securities premium account should be debited
  • Securities premium account should be credited
  • Securities premium account should be neither debited nor credited
  • None of the above
If a share of Rs. 10 on which Rs. 6 has been paid is forfeited, the minimum price it can be reissued is ________.
  • Rs. 10
  • Rs. 8
  • Rs. 6
  • Rs. 4
_____________ is debited with the amount called-up in respect of shares are forfeited and credited with _________, as the case may be.
  • Share premium account, share capital account
  • Share capital account, calls in arrears account
  • Share capital account, share premium account
  • Calls in arrears, share forfeited account
Shares can be forfeited ______________.
  • For non-payment of call money
  • For failure to attend meetings
  • For failure to repay the loan to the bank
  • For which shares are pledged as a security
If the securities premium has not been received, either wholly or partially, in respect of the shares forfeited, the ________ will also be debited with the amount of premium not received along-with _________ at the time of forfeiture.
  • Share premium account, Share capital account
  • Share capital account,Share premium account
  • Share forfeited account, Share premium account
  • Share capital account, Share forfeited account
When the shareholder makes the payment of calls-in-arrears together with interest, the entry will be:
  • Calls-in-Arrears A/c Dr.
            To Bank A/c
            To Interest A/c 
  • Bank A/c Dr.
            To Calls-in-Arrears A/c 
            To Interest A/c 
  • Bank A/c Dr. 
            To Share Application A/c
             To Calls in arrears A/c 
  • Share Application A/c Dr.
            To Bank A/c
            To Calls-in-Arrears A/c 
Shobhana Ltd. forfeited $$30$$  shares of $$Rs.10$$ each fully called up for non-payment of allotment money of $$Rs.3$$ per share and call money of $$Rs.4$$ per share. These shares are re-issued for $$Rs.8$$ per share fully paid. What is the amount to be transferred to Capital Reserve Account?
  • $$Rs.300$$
  • $$Rs.60$$
  • $$Rs.30$$
  • $$Rs.90$$
If a share of Rs. 10 on which Rs. 8 is called -up and Rs. 6 paid is forfeited, the Share Capital Account will  be debited with _________.
  • Rs. 10
  • Rs. 8
  • Rs. 6
  • Rs. 4
When shares are forfeited all entries relating to the forfeited shares, except those relating to premium, already recorded in the accounting records, must be ______.
  • Same
  • Reversed
  • Different
  • All of the above
Which of the following statement is correct:
  • Dividend is to be paid within $$30$$ days of declaration
  • Shareholders may declare a dividend smaller than recommended by board.
  • They cannot declare a larger dividend or any dividend where none has been recommended
  • All of the above
When any shareholder fails to pay the amount due on allotment or on any of the calls, such amount is known as ________.
  • Calls-in-Arrears
  • Share Capital
  • Share Application
  • Share Allotment
Bonus shares can be issued if the __________.
  • Article of association permit it
  • Proposal is approved by the shareholders in the general meeting
  • Issue is made out of free reserves
  • All of the above
The following journal entry is recorded for the amount of calls received in advance ______________________.
  • Bank A/c Dr.
           To Calls-in-Advance A/c
  • Calls-in-Advance Dr.
            To Bank A/c 
  • Interest on Calls-in-Advance A/c Dr.
             To Calls-in-Advance A/c 
  • Bank A/c Dr.
              To Interest on Calls-in-Advance A/c
The main objectives of the company are stated in __________.
  • articles of association
  • memorandum of association
  • certificate of incorporation
  • companies act
If the amount of minimum subscription is not received to the extent of _______,  the issue disslove.
  • 85%
  • 90%
  • 95%
  • 80%
_________ is a situation where number of shares applied are less than the number for which applications have been invited for subscription.
  • Over Subscription
  • Under Subscription
  • Fully Subscribed
  • Partly Subscribed
If shares are issued at premium, i.e. at an amount more than the nominal or par value of shares, the amount of premium is credited to a separate account called ________.
  • Securities Discount Account
  • Securities Premium Account
  • Discount on Issue of Share Account
  • Share Forfeiture Account
A company offered  2,00,000 shares for subscription to the public, but the applications were received for 1,90,000 shares only. The allotment will be confirmed to _________ shares.
  • 2,00,000
  • 1,90,000
  • 3,90,000
  • 10,000
Under issue of shares for consideration other than cash, the number of shares to be issued to the vendor will be calculated as ___________________.
  • Amount Payable/Issue Price
  • Issue Price/Amount Payable
  • Issue Price/No. of Shares
  • No. of Shares/Issue Price
Shares can be converted into stock when _________.
  • authorized by central government
  • fully paid
  • fully paid and authorized by articles of association
  • (a) and (c) are satisfied
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