Question by CA (Dr.) G.S.GREWAL, Series – 28

Issue of Share Capital

True / False

  1. Equity shareholders are the owners of the company.

Fill in the Blank

  1. The % associated with preference shares as prefix (e.g., 10% Preference Share)s is the rate of ________.

Multiple Choice Question

  1. Which of the following capitals is shown in the company’s Balance Sheet:-

(a) Authorised Capital

(b) Issued Capital

(c) Subscribed and Fully Paid Up

(d) Reserve capital

Answer – Question by CA (Dr.) G.S.GREWAL, Series – 28

True/False

  1. True

Reason: Equity shareholders are the holders of the company as they have voting rights in all the circumstances.

Fill in the Blank

  1. Dividend

Multiple Choice Question

  1. (c)

Reason: In the Company’s Balance Sheet, only Subscribed and Fully paid up share Capital Amount is shown. Authorised Capital and Issued Capital are shown in Notes to Accounts and Reserve Capital is not shown in the Company’s Balance Sheet and Note to Accounts.

Question by CA (Dr.) G.S.GREWAL, Series – 29

Issue of Share Capital

True / False

  1. Subscribed capital can be more than issued capital.

Fill in the Blank

  1. When the called up amount is not paid by the shareholder then it may be transferred to ____________ account.

Multiple Choice Question

  1. When the shares are issued for consideration other than cash which account will be credited:-

(a) Securities Premium Account

(b) Capital Reserve Account

(c) Vendor’s Account

(d) Share Capital Account

Answer – Question by CA (Dr.) G.S.GREWAL, Series – 29

True/False

  1. False

Reason: Subscribed Capital is a part of Issued Capital which the company has issued for cash or for consideration other than cash. It includes shares issued for subscription and subscribed, shares subscribed by signatories to the Memorandum of Association, shares subscribed by the directors as qualifying shares and shares allotted for consideration other than cash. Hence we can say that it cannot be more than issued capital.

Fill in the Blank

  1. Calls-in-Arrears

Multiple Choice Question

  1. (d)

Reason: If shares are issued to Vendor then following entry is passed:-

Vendor’s A/c                          …Dr.   (With the nominal value of shares allotted)

      To Share Capital A/c

Hence it is clear that Share Capital Account will be credited since the allotted share amount transfer to Share Capital Account.

 

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