CBSE Questions for Class 12 Commerce Accountancy Accounting For Share Capital Quiz 6 - MCQExams.com

C consigned goods costing Rs 6,000 to his agent. Freight and insurance paid by consignor RsConsignee's expenses Rs4/5th of the goods were sold for Rs 3,Commission 2% on sales. Consignee wants to settle the balance with the help of a bank draft. The amount of draft will be _______________.
  • Rs 2,740
  • Rs 2,800
  • Rs 3,000
  • Rs 1,800
A and B enter into a joint venture to underwrite the shares of a company which make an equity issue of 100,000 shares ofRs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2 . The balance shares not subscribed by the public were purchased by A and B in profit sharing ratio. How many shares is purchased by B?
  • 80,000 shares
  • 72,000 shares
  • 12,000 shares
  • 8,000 shares
Mr. A had a beginning credit balance of Rs. 21,000 in his capital account.At the close of the period his drawing account had a debit balance of Rs. 2,On the end-of-period balance sheet, his capital balance is Rs. 32,If he contributed an additional Rs. 2,000 to the firm during the period, the period's net income is  _______________.
  • Rs. 12,400
  • Rs. 11,200
  • Rs.9,000
  • Rs.10,800
Bonus Shares can be issued only to equity shareholders.
  • True
  • False
Rs.
Opening capital80,000
Closing capital1,20,000
Net profit during the year20000
The trader has
  • Drawings of Rs. 20000
  • Brought additional capital of Rs. 30000
  • Brought additional capital of Rs. 40000
  • Both (a) and (c)
A company can issue preference shares which are redeemable after the expiry of $$20$$ years from the date of its issue.
  • True
  • False
The amount to be collected on application of share should ___________.
  • not be more than $$5$$% of the nominal value of shares
  • not be less than $$5$$% of the nominal value of shares
  • not be more than $$5$$% of the issue price of the share
  • not be less than $$5$$% of the issue price of the share
The excess price received over the par value of shares, should be credited to _______________.
  • Calls-in-advance account
  • Share capital account
  • Capital account
  • Securities premium account
Share premium amount cannot be used for _____________.
  • Writing off preliminary expenses
  • Writing off discount on issue of shares account
  • To pay dividend
  • Both (a) and (b)
In case the whole or a part of the shares issued are not subscribed by the public, who will subscribe such unsubscribed securities for a fixed commission?
  • Brokers
  • Commission agents
  • Underwriters
  • Sales agents
When shares are forfeited, the share capital account is debited with _______ and the Share Forfeited Account is credited with ________.
  • Paid-up capital of shares forfeited; Called up capital of shares forfeited
  • Called up capital of shares forfeited; Calls-in-arrears of shares forfeited
  • Called up capital of shares forfeited; Amount received on shares forfeited
  • Calls-in-arrears of shares forfeited; Amount received on shares forfeited
A company issued $$25,000$$ shares of $$Rs. 10$$ each. The amount was demanded as under:
On application - $$Rs. 2$$ On allotment - $$Rs. 4$$
On $$1st$$ Call - $$Rs. 2$$ On $$2nd$$ Call - $$Rs. 2$$
A shareholder, who was allotted $$500$$ shares did not pay $$1st$$ Call and $$2nd$$ Call money. His shares have been forfeited. What amount will be credited to share forfeited account?
  • $$Rs. 1,000$$
  • $$Rs. 3,000$$
  • $$Rs. 4,000$$
  • $$Rs. 2,000$$
A company may issue shares at a discount in a class already issued, if ________________.
  • it is authorised by a resolution passed at the General Meeting and approved by the Company Law Board
  • at least one year has elapsed since the receipt of the certificate to commence business
  • the particulars of the discount allowed on the issue of shares are clearly mentioned in the prospectus issued
  • all the above conditions are fulfilled
The voluntary return of shares for cancellation by shareholders is called ___________.
  • surrender of shares
  • forfeiture of shares
  • transfer of shares
  • transmission of shares
Which of the following statements is not true with regard to issue of shares by a joint stock company?
  • Shares can be issued for consideration other than cash.
  • In the event of over-subscription, the company cannot allot more number of shares than those specified in the prospectus.
  • As per the SEBI guidelines, the minimum subscription clause is applicable only to the first issue of shares by the company.
  • The share application money is converted into share capital even before the board of directors approve the allotment of shares.
The following information pertains to X Ltd: The amount of dividend payable will be ___________.
Equity share capital called upRs. $$5,00,000$$
Calls in arrearRs. $$40,000$$
Calls in advanceRs. $$25,000$$
Proposed dividend$$15\%$$
  • Rs. $$75,000$$
  • Rs. $$72,750$$
  • Rs. $$71,250$$
  • Rs. $$69,000$$
Share Application and Allotment A/c are ___________.
  • Personal A/c
  • Real A/c
  • Nominal A/c
  • Addition to Capital A/c
At the time of forfeiture of shares which were originally issued at a discount, the accounting entry will be
I. A Debit Share capital account with the called-up value of shares forfeited.
II. A Credit Share forfeiture account with the amount received on forfeited shares.
III. A Credit Discount on issue of shares with the amount of discount allowed on forfeited shares,
IV. A Credit Calls-in-arrears with the amount due but not paid on forfeited shares.
  • Both (I) and (IV)
  • Both (IV) and (III)
  • Both (I) and (II)
  • (I), (II), (III), and (IV)
The subscribed share capital of S Ltd. is Rs. $$80,00,000$$ of Rs. $$100$$ each. There were no calls in arrear till the final call was made. The final call made was paid no $$77,500$$ shares. The calls in arrear amounted to Rs. $$62,500$$. The final call on share will be _____________.
  • Rs. $$25$$
  • Rs. $$7.80$$
  • Rs. $$20$$
  • Rs. $$62.50$$
A company invited applications for certain number of equity shares and received applications for more number of shares along with the applications money. Which of the following alternative can be followed?
I. Refund the excess applications.
II. Make pro-rata allotment to all the applicants, and no refund of excess application money.
III. Not to allot any shares to some applicants, full allotment to some of the applications and pro-rata allotment to the rest of the applicants.
IV. Not to allot any shares to some applicants and make pro-rata allotment to other applicants.
  • Only (II)
  • Both (I) and (II)
  • All of these
  • Both (II) and (IV)
Which of the following statements is true regarding calls-in-arrears?
  • Calls-in-arrears is that part of called up capital which remains unpaid.
  • It is not shown in the balance sheet until the defaulted shares are forfeited.
  • The rate of interest on calls-in-arrear is chargeable at $$10$$% p.a., if a company adopts Table A.
  • Charging of interest on calls-in-arrears need not be permitted by the Articles of Association.
Which of the following is not correct?
  • Nominal capital is the maximum amount that a company is authorised to issue to the public without altering the memorandum of association.
  • Subscribed capital is that part of nominal capital that is offered to the public for subscription.
  • Subscribed capital will be equal to the issued capital, when all the shares offered to the public are taken up by the public.
  • Called up capital is that part of the subscribed capital that has been called up.
If the forfeited shares are issued at a premium, the amount of the premium shall be credited to ___________.
  • Share Capital A/c
  • Capital Reserve A/c
  • Share Forfeiture A/c
  • Security Premium A/c
Which one of the following securities cannot be issued by a company in India?
  • Participating preference shares.
  • Redeemable preference shares.
  • Deferred shares.
  • Debentures.
Following are the differences between Capital Amount and Current Account ______________.
  • Capital Account is prepared under fixed capital method whereas current account is prepared under fluctuating capital method.
  • In capital account only capital introduced and withdrawn is recorded, all order transactions between the firm and partners is recorded in the current account.
  • Interest is sometimes paid on capital account balance but no such interest is payable on current account balances.
  • Both (b) and (c).
The following information pertains to X Ltd:
(i) Equity share capital called-up $$Rs. 5,00,000$$
(ii) Calls-in-arrear $$Rs. 40,000$$
(iii) Calls-in-advance $$Rs. 25,000$$
(iv) Proposed dividend $$12.5$$%
Amount of dividend will be ______________.
  • $$Rs. 61,800$$
  • $$Rs. 72,750$$
  • $$Rs. 57,500$$
  • $$Rs. 60,000$$
Which one of the following is known as Registered Capital of the Company?
  • Paid-up capital.
  • Authorised capital.
  • Uncalled capital.
  • Reserved capital.
Right shares are the shares _____________.
  • issued to the directors of the company
  • first offered to the debenture holders
  • first offered to the existing shareholders
  • issued by a newly formed company
$$500$$ shares of $$Rs. 20$$ each issued at $$5$$% discount are forfeited for non-payment of allotment and final call money @ $$Rs. 9$$ and $$Rs. 5$$ respectively. Amount credited to share forfeited A/c is ______________.
  • $$Rs. 2,000$$
  • $$Rs. 2,500$$
  • $$Rs. 3,000$$
  • $$Rs. 7,000$$
Pro-rata allotment of shares means allotment of shares _____________.
  • equally among all 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
A Company forfeited 20 shares of Rs.10 each, Rs.7 called up, on which application money of Rs.5 per share was paid. The entry for forfeiture is ___________.
  • Share Capital A/c Dr. Rs.100
      To Share Forfeited A/c Rs.140
  • Share Capital A/c Dr. Rs.140
      To Share Application A/c Rs.140
  • Share Capital A/c Dr. Rs.140
      To Share Forfeited A/c Rs.100
      To Calls-in-arrears A/c RS.40
  • Share Capital A/c Dr. Rs.50
      To Share Allotment A/c Rs.50
X Co. forfeits $$1000$$ shares. If $$Rs. 10$$ each called up and only $$Rs. 5$$ paid on application. The amount to be forfeited is ___________.
  • $$Rs. 5,000$$
  • $$Rs. 700$$
  • $$Rs. 200$$
  • $$Rs. 300$$
The Authorised Capital ($$Rs. 10$$ per share) of a company is $$Rs. 5$$ lakhs, Issued Capital $$Rs. 3$$ lakhs and Subscribed Capital $$Rs. 2$$ lakhs. It has received $$Rs. 5$$ per share on application and allotment and $$Rs. 2$$ per share on first call except on $$2,500$$ shares, which have not been forfeited. Share Capital A/c is credited by _______________.
  • $$Rs. 3,00,000$$
  • $$Rs. 2,00,000$$
  • $$Rs. 1,40,000$$
  • $$Rs. 1,35,000$$
IJL Ltd. Issued 20,000 shares of 10 each at a

premium of 20% on May 1, 2004, payable as follows:
On application 4.50 (inclusive of premium)
On allotment 2.50
On first and final call 5.00
Mrs. M, to whom 1,000 shares were allotted, paid

5,000 on June 1,At the time of remitting the allotment money, she

indicated that the excess money should be adjusted towards the call money. The directors

of the company made the first and final call on October 31,The company

has a policy of paying interest on calls-in-advance. The amount of interest

paid to Mrs. M on calls-in-advance = ?
  • 62.50
  • 52.08
  • 125.00
  • 150.00
M/s. ABC Ltd. forfeited $$20$$ shares of $$Rs. 10$$ each, $$Rs. 8$$ called up, on which $$X$$ has paid application an allotment money of $$Rs. 2$$ and $$Rs. 3$$ respectively. These shares were reissued to Y at $$Rs. 6$$ each fully paid. What was the balance in share forfeiture account before the shares were reissued?
  • $$Rs. 40$$
  • $$Rs. 60$$
  • $$Rs. 100$$
  • $$Rs. 160$$
In case of a company Buy Back is related to:
  • Prospectus
  • Shares
  • Debentures
  • Cheques
Which of the following statement is false?
  • Interest on calls-in-advance is paid from the date of receipt of advance to the date of relevant call
  • Interest on calls-in-advance is paid from the date of receipt of advance to the date of appropriation to the relevant call
  • Interest on calls-in-advance is paid at the rate of $$6$$% p/a
  • Payment of interest on calls-in-advance is at the discretion of the company
Use the following information for questions given ahead:
D Ltd. issued $$2,00,000$$ shares of $$Rs. 100$$ each at a premium of $$Rs. 20$$ per share payable as follows:
On application $$Rs. 20$$; On allotment $$Rs. 50$$ (including premium); On first call $$Rs. 30$$; On second and final call $$Rs. 20$$.
Applications were received for $$3,00,000$$ shares and pro-rata allotment was made to applications of $$2,40,000$$ shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. A, to whom $$4,000$$ shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and B, the holder of $$6,000$$ shares, failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, $$8,000$$ shares were reissued to C at a discount of $$10$$%, the whole of A's forfeited shares being reissued.
Amount received on application will be _______________.
  • $$Rs. 40,00,000$$
  • $$Rs. 60,00,000$$
  • $$Rs. 48,00,000$$
  • $$Rs. 24,00,000$$
The balance of Capital Redemption Reserve Amount is available for ______________________.
  • Redemption of redeemable preference shares
  • Redemption of redeemable debentures
  • Reorganization of share capital
  • Issue of bonus shares
Use the following information for questions given ahead:
D Ltd. issued $$2,00,000$$ shares of $$Rs. 100$$ each at a premium of $$Rs. 20$$ per share payable as follows:
On application $$Rs. 20$$; On allotment $$Rs. 50$$ (including premium); On first call $$Rs. 30$$; On second and final call $$Rs. 20$$.
Applications were received for $$3,00,000$$ shares and pro-rata allotment was made to applications of $$2,40,000$$ shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. A, to whom $$4,000$$ shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and B, the holder of $$6,000$$ shares, failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, $$8,000$$ shares were reissued to C at a discount of $$10$$%, the whole of A's forfeited shares being reissued.
Amount transferred to Share Forfeiture Account at the time of forfeiting A's share will be _________________.
  • $$Rs. 80,000$$
  • $$Rs. 1,00,000$$
  • $$Rs. 3,00,000$$
  • $$Rs. 96,000$$
The directors of a company made the final call of $$Rs. 30$$ per share on June $$15, 2004$$, indicating the last date of payment of call money to be June $$30,2004$$. Mr. X, holding $$5,000$$ shares, paid the call money on Aug. $$15, 2004$$.
According to Table A, the amount of interest on calls-in-arrear to be paid by shareholder will be _____________.
  • $$Rs. 625.00$$
  • $$Rs. 937.50$$
  • $$Rs. 750.00$$
  • $$Rs. 1,125.00$$
Which type of the following shares have the right to receive dividends unpaid in prior years, whenever earnings become adequate?
  • Cumulative preference shares
  • Participating preference shares
  • Convertible preference shares
  • Callable preference shares
Closing Capitals of Ram, Shyam and Mohan was 50,000; 45,000 and 30,000 respectively. Their drawings during the year were 10,000, 5,000 and 12,000 respectively. Amount of net profit earned during the year was 18,000 which was distributed in the ration of 3 :2 :Opening capital of Mohan will be:
  • 44,000
  • 56,000
  • 39,000
  • 45,000
Securities premium amount cannot be used for:
  • writing off preliminary expenses
  • writing off discount on issue of shares
  • paying dividend
  • Both (a) and (b)
Which of the following conditions must be fulfilled to issue the shares at discount?
  • Issue of shares at a discount must be authorized by an ordinary resolution of the company
  • Issue most be sanctioned by the Company Law Board
  • One year must have passed since the date on which the company was allowed to commerce business
  • All of the above
Premium on issue of shares can be used for __________. 
  • Distributing profits
  • Issue of bonus shares
  • Paying the amount to directors
  • Transfer to dividend equalization fund
On a share of $$Rs. 20$$ issued at a premium of $$Rs. 4$$ on which $$Rs. 16$$ (including premium) has been called up and $$Rs. 10$$ (including premium) paid is forfeited, the share capital account should be debited by ____________. 
  • $$Rs. 20$$
  • $$Rs. 12$$
  • $$Rs. 10$$
  • $$Rs. 24$$
There are 30,000 preference shares of Rs. 10 each fully called up. But there are calls-in-arrears of Rs. 2,000 @ Rs. 2 per share. Company can redeem:
  • 30,000 shares
  • 29,000 shares
  • 28,000 shares
  • Shares cannot be redeemed.
Discount allowed on the reissue of forfeited share cannot exceed:
  • 10% of the paid-up capital
  • 10% of the capital reissued
  • The amount received on forfeited share
  • The amount not received on forfeited shares
Which of the following relationships is/are false?
  • Net profit = Gross profit Administration and other expenses
  • Net profit = Gross profit Administration expenses and other expenses
  • Opening stock + Purchase Closing stock = Cost of sales
  • Opening stock + Purchase + Gross profit + Direct expenses Closing stock = sales
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