Share Capital Vol.2 MCQ for TERM 1 BOARD EXAMINATION
Q. 1. Reserve capital is not a part of:
(A) Authorised Capital
(B) Subscribed Capital
(C) Unsubscribed Capital
(D) Issued Capital
Ans. Option (C) is correct.
Q. 2. The part of authorized capital which can be called up only on the company being wound up is called :
(A) Issued Capital
(B) Unsubscribed Capital
(C) Reserve Capital
(D) None of these
Ans. Option (C) is correct.
Explanation: Reserve capital represents the
portion of subscribed capital that remains un called except in case of winding up or at the time of liquidation.
Q. 3. The owners of the shares are called :
(A) Share Capital (B) Shareholders
(C) Creditors
(D) Debtors
Ans. Option (B) is correct
Q. 4. The first stage of incorporating a company is :
(A) Registration
(B) Promotion
(C) Commencement of business
(D) None of the above
Ans. Option (B) is correct.
Q. 5. Those preference shares which do not carry the right to receive arrears of dividend :
(A) Non-participating Preference Shares
(B) Irredeemable Preference Shares
(C) Non-convertible Preference Shares
(D) Non-cumulative Preference Shares
Ans. Option (D) is correct.
Q. 6. ESOP offered by company will create / retain :
(A) A sense of belongingness in employees
(B) High calibre
(C) High Productivity
(D) All of the above
Ans. Option (D) is correct.
Q.7. Pick the odd one out:
(A) Irredeemable preference share
(B) Participating preference share
(C) Cumulative preference share
(D) Open-ended preference share
Ans. Option (D) is correct
Q. 8. Subscription of shares should not be less than____% of the issued shares.
(A) 85%
(B) 90%
(C) 95%
(D) 100%
Ans. Option (B) is correct
Q. 9. A company forfeited 4,000 shares of 10 each on which application money of 3 has been paid. Out of these 2,000 shares were reissued as fully paid up and * 4,000 has been transferred to capital reserve.
Calculate the rate at which these shares were reissued :
(A) 10 rupees per share
(B) 9 rupees per share
(C) 11 rupees per share
(D) 8 rupees per share
Ans. Option (B) is correct.
Q. 10. Vanya Ltd. forfeited 20,000 equity shares of 100 each for non-payment of first and final call of 40 per share. The maximum amount of discount at which these share can be re-issued will be:
(A) ₹8,00,000
(B) 12,00,000
(C) 20,00,000
(D) 20,000
Ans. Option (B) is correct.
Q. 11. Which of the following is not a purpose for which the Securities Premium amount can be used?
(A) Issuing fully paid bonus shares to shareholders
(B) Issuing partly paid up bonus shares to
shareholders
(C) Writing off preliminary expenses of the
company
(D) In purchasing its own shares (buy back)
Ans. Option (B) is correct.
Q. 12. A forfeited share can:
(A) not be re-issued at discount
(B) re-issued at a maximum discount of 10%
(C) be re-issued at a maximum discount equal to the amount forfeited
(D) None of the above
Ans. Option (C) is correct.
Q. 13/When forfeited shares are re-issued the amount of discount allowed on these shares cannot exceed :
(A) 10% of called-up capital per share
(B) 6% of paid-up capital per share
(C) The amount received per share on forfeited shares
(D) The unpaid amount per share on forfeited
Ans. Option (C) is correct.
Q.14. Gama Chemicals Ltd. is a newly formed company. How much discount per share can it allow for issuing its shares to the public ?
(A) 6%
(B) 10%
(C) 5%
(D) None of these
Ans. Option (D) is correct.
Q. 15. Share Allotment Account is a/an :
(A) Personal Account
(B) Real Account
(C) Nominal Account
(D) None of the above
Ans. Option (A) is correct.
Q. 16. Balance in Share Forfeiture Account is shown in the balance sheet under the head of :
(A) Reserves and Surplus
(B) Long-term Borrowings
(C) Share Capital
(D) Other Current Liabilities
Ans. Option (C) is correct.
Q. 17. Pick the odd one out:
(A) Issue of shares to vendors
(B) Issue of shares to general public
(C) Issue of shares to underwriters
(D) Issue of shares to promoters
Ans. Option (B) is correct.
Q. 19. Y Ltd. invited applications for 10,000 shares of 10 each. Applications were received for 9,000 shares. Identify the kind of subscription
(A) Under Subscription
(B) Over Subscription
(C) Full Subscription
(D) None of the above
Ans. Option (A) is correct
Q. 20. HR Limited issued 10,000 equity shares @ 10 each at 10% premium. All shares were subscribed and amount was received. Identity the amount to be
transferred to Securities Premium Reserve A/C.
(A) 10,000
(B) 1,000
(C) 1,00,000
(D) 9,000
Ans. Option (A) is correct.
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