Bihar Board Important 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Bihar Board 12th Accountancy Objective Questions and Answers

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

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Question 1.
Equity shareholders are :
(A) Creditors of the company
(B) Owners of the company
(C) Customers of the company
(D) None of these
Answer:
(B) Owners of the company

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 2.
Balance of Forfeited Shares Account after reissue of forfeited shares is transferred to :
(A) Profit & Loss A/c
(B) Capital Reserve Account
(C) General Reserve Account
(D) None of these
Answer:
(B) Capital Reserve Account

Question 3.
Under the provisions of Companies Act, company can issue:
(A) Only equity shares
(B) Only preference shares
(C) Preference shares and equity shares
(D) None of these
Answer:
(C) Preference shares and equity shares

Question 4.
Reight shares are the shares, which :
(A) Are issued to the Direction of the company
(B) Are issued to existing shareholders of the company
(C) Are issued to promoters in consideration of their services
(D) Are issued to the vendors for purchasing assets
Answer:
(B) Are issued to existing shareholders of the company

Question 5.
Total amount of liabilities side includes :
(A) Authorised Capital
(B) Issued Capital
(C) Subscribed Capital
(D) Paid-up Capital
Answer:
(D) Paid-up Capital

Question 6.
A company issues its shares at premium under which Section of Indian Companies Act, 2013 ?
(A) 78
(B) 79
(C) 52
(D) 53
Answer:
(C) 52

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 7.
Shares can be forfeited :
( A) For failure to attend meetings
(B) For non-payment of call money
(C) For failure to repay the loan to the Bank
(D) For which shares are pledged as a security
Answer:
(B) For non-payment of call money

Question 8.
Shareholders get:
(A) Interest
(B) Dividend
(C) Commission
(D) Profit
Answer:
(B) Dividend

Question 9.
According to Table E of the Companies Act, 2013 interest on calls in arrears charged should not exceed :
(A) 5% p.a.
(B) 6% p.a.
(C) 8%p.a.
(D) 10%p.a.
Answer:
(D) 10%p.a.

Question 10.
Premium on issue of shares is a :
(A) Capital Gain
(B) Capital Loss
(C) General Profit
(D) Geneal Loss
Answer:
(A) Capital Gain

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Question 11.
Premium on issue of shares is shown on which side of the Balance sheet.
(A) Assets
(B) Liabilities
(C) Both
(D) None of these
Answer:
(B) Liabilities

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 12.
Share Allotment Account is :
(A) Personal A/c
(B) Real A/c
(C) Nominal A/c
(D) None of these
Answer:
(A) Personal A/c

Question 13.
The portion of the authorised capital which can be called-up only on the liquidation of the company is called:
(A) Issued Capital
(B) Called-up Capital
(C) Uncalled Capital
(D) Reserve Capital
Answer:
(D) Reserve Capital

Question 14.
Premium on issue of shares can be used for :
(A) Issue of Bonus shares
(B) Distribution of Profit
(C) Transferring to General Reserve
(D) All these
Answer:
(A) Issue of Bonus shares

Question 15.
If equity share of ₹ 10 Rs. each is issued at ₹ 12 each, it is called:
(A) Issued at Par
(B) Issued at Premium
(C) Issued at Discount
(D) None of these
Answer:
(B) Issued at Premium

Question 16.
The maximum capital beyond which a company is not allowed to raise funds, by issue of shares is called …………..
(A) Issued capital
(B) Reserve capital
(C) Authorised capital
(D) Subscribed capital
Answer:
(B) Reserve capital

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 17.
As per Table F the maximum rate of interest on calls in advance paid is:
(A) 8% p.a.
(B) 12% p.a.
(C) 5 % p.a.
(D) None of these
Answer:
(B) 12% p.a.

Question 18.
As per the Companies Act, only preference shares, which are redeemable within …………. can be issued.
(A) 24 years
(B) 22 years
(C) 30 years
(D) 20 years
Answer:
(D) 20 years

Question 19.
Which one of the following is the registered capital of the company ?
(A) Paid-up capital
(B) Uncalled capital
(C) Authorised capital
(D) Issued capital
Answer:
(C) Authorised capital

Question 20.
Dividends are usually paid on :
(A) Authorised Capital
(B) Issued Capital
(C) Called-up Capital
(D) Paid-up Capital
Answer:
(D) Paid-up Capital

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Question 21.
If vendors are issued fully paid shares of ₹ 1,00,000 in consideration of net assets of ₹ 1,20,000 the balance of ₹ 20,000 will be credited to :
(A) Goodwill Account
(B) Capital Reserve Account
(C) Vendor’s Account
(D) Profit & Loss Account
Answer:
(B) Capital Reserve Account

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 22.
Which account should be dibited when shous ane issued to promoters:
(A) Share Capital A/c
(B) Assets A/c
(C) Promoter’s A/c
(D) Goodwill A/c
Answer:
(D) Goodwill A/c

Question 23.
According to Section 52 of the Compaines Act, the amount in the Securities Premium Account cannot be used for the purpose of:
(A) Issue of fully Paid Bonus Shares
(B) Writing Off Losses of the Company
(C) Writing off Preliminary Expenses
(D) Writing Off Commission or Discount on Issue of Shares
Answer:
(B) Writing Off Losses of the Company

Question 24.
10,000 equity shares of 10 Rs. each were issued to public at a premium of ₹ 2 per share payable on allotment.
Applications were received for ₹ 12,000 shares. Amount of securities premium account will be :
(A) ₹ 20,000
(B) ₹ 24,000
(C) ₹ 4,000
(D) ₹ 1,600
Answer:
(A) ₹ 20,000

Question 25.
A Ltd. purchased a machinery for 1,80,000 Rs. for which it is paying by issue of shares of 100 Rs. each at 20% premium. How many shares will be issued as consideration. ?
(A) 2,500
(B) 2,000
(C) 1,500
(D) 3,000
Answer:
(C) 1,500

Question 26.
Right Shares are issued to :
(A) Promoters for the Services
(B) Holders of Convertible Debentures
(C) Existing Shareholders
(D) All of the above
Answer:
(C) Existing Shareholders

Question 27.
A company is registered with a share capital of ₹ 1,00,000 Rs. divided into ₹ 10,000 shares of ₹ 10 each. Of these shares 9,990 shares are held by Rajeev and 10 Shares are held by Sanjay. In the eye of law it is treated as:
(A) Partnership
(B) Private Company
(C) Public Compancy
(D) Government Company
Answer:
(B) Private Company

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 28.
Which of the following should be deducted from the called-up capital to find out paid-up capital:
(A) Calls-in-advance
(B) Calls-in-arrear
(C) Share forfeiture
(D) Discount on issue of shares
Answer:
(B) Calls-in-arrear

Question 29.
Reserve share capital means :
(A) Part of authorised capital to be called at the beginning
(B) Portion of uncalled capital to be called only at liquidation
(C) Over subscribed capital
(D) Under subscribed capital
Answer:
(B) Portion of uncalled capital to be called only at liquidation

Question 30.
When full amount is due on any call but it is not received, then the short fall is debited to :
(A) Calls-in-advance
(B) Calls-in-arrear
(C) Share Capital
(D) Suspense Account
Answer:
(B) Calls-in-arrear

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Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 31.
The difference between subscribed capital and called up capital is called :
(A) Calls-in-arear
(B) Calls-in-advance
(C) Uncalled capital
(D) None of these
Answer:
(C) Uncalled capital

Question 32.
Which statement is issued before the issue of shares ?
(A) Prospectus
(B) Articles of Association
(C) Memorandum of Association
(D) All of these
Answer:
(D) All of these

Question 33.
Company can utilise securities premium for :
(A) Writing off loss incurred on revaluation of asset
(B) Issuing fully paid bonus shares
(C) Paying divided
(D) Writing off trading loss
Answer:
(B) Issuing fully paid bonus shares

Question 34.
When a company issues fully paid shares to promoters
for their services, the journal entry will be:
(A) Bank A/c Dr.
To Share Capital A/c
(B) Good will A/c Dr.
To Share Capital A/c
(C) Promoters Personal A/c Dr.
To Share Capital A/c
(D) Promotion Expenses A/c Dr.
To Share Capital A/c
Answer:
(B) GoodwillA/c Dr.
To Share Capital A/c

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 35.
When a company issues shares at a premium, amount of premium may be received by the company :
(A) Along with application money
(B) Along with application money
(C) Along with calls
(D) Along with any of the above
Answer:
(D) Along with any of the above

Question 36.
Share Application Account is :
(A) Personal Account
(B) Real Account
(C) Nominal/ Account
(D) None of these
Answer:
(A) Personal Account

Question 37.
Secrities Premium can not be applied :
(A) For paying dividend to members
(B) For issuing bonus shares to members
(C) For writing off preliminary expenses of company
(D) For writing off discount on issue of debentures
Answer:
(A) For paying dividend to members

Question 38.
A joint stock company is :
(A) An artificial legal person
(B) Natural person
(C) A general person
(D) None of these
Answer:
(A) An artificial legal person

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 39.
Equity shareholders are :
(A) Customers
(B) Creditors
(C) Debtors
(D) Owners
Answer:
(D) Owners

Question 40.
Reserve capital means :
(A) A part of subscribed uncalled capital
(B) Reserve Profit
(C) A part of Capital Reserve
(D) A part of Capital Redemption Reserve
Answer:
(A) A part of subscribed uncalled capital

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Question 41.
Securities Premimum is shown undr which head in the Balance Sheet ?
(A) Reserve and Surplus
(B) Miscellaneous Expenditure
(C) Current Liabilities
(D) Share Capital
Answer:
(A) Reserve and Surplus

Question 42.
Shares may be issued :
(A) At par value
(B) At FYemimum
(C) At Discount
(D) Both (A) & (B)
Answer:
(D) Both (A) & (B)

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 43.
Capital included in the liabilities of a company is called :
(A) Authorised Capital
(B) Issued Capital
(C) Subscribed Capital
(D) Paid-up Capital
Answer:
(D) Paid-up Capital

Question 44.
An issue of shares which is not a public issue but offered to a selected group of persons is called :
(A) Public offer
(B) Private placement of shares
(C) Initial public offer
(D) None of these
Answer:
(D) None of these

Question 45.
If a share of ₹ 10 on which ₹ 8 has been called and ₹ 6 is paid is forfeited, the Share Capital Account should be debited with :
(A) ₹ 8
(B) ₹ 10
(C) ₹ 6
(D) ₹ 2
Answer:
(A) ₹ 8

Question 46.
When shares are forfeited, the Share Capital Account is debited with:
(A) Nominal value of Shares
(B) Market value of Shares
(C) Called-up value of Shares
(D) Paid-up value of Shares
Answer:
(C) Called-up value of Shares

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 47.
If the loss on reissue of shares is less than the amount forfeited, the ‘surplus’ or profit is transferred to :
(A) Capital Reserve
(B) Revenue Reserve
(C) Profit & Loss A/c
(D) None of these
Answer:
(A) Capital Reserve

Question 48.
J. Ltd. re-issue 2,000 shares which where forfeited by crediting share forfeiture account by ₹ 3,000. These shares were re-issued at ₹ 9 per share. The amount transferred to capital reserve will be :
(A) ₹ 3,000
(B) ₹ 2,000
(C) ₹ 1000
(D) Nil
Answer:
(C) ₹ 1000

Question 49.
If a share of ₹ 10 on which ₹ 8 has been paid up is forfeited, it can be reissued at the minimum price of…….
(A) 10 Rs. per share
(B) 8 Rs. per share
(C) 5 Rs. per share
(D) 2 Rs. per share
Answer:
(D) 2 Rs. per share

Question 50.
Z & Co. forfeited 100 shares of 10 Rs. each for non-payment of final call of 2 Rs. per share. All the forfeited shares were re-issued at 9 Rs. per share. What amount will be transferred to Capital Reserve A/c ?
(A) 700 Rs.
(B) 800 Rs.
(C) 900Rs.
(D) 1,000 Rs.
Answer:
(A) 700 Rs.

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Question 51.
Forfeiture of shares results in the reduction of:
(A) Paid-up Capital
(B) Authorised Capital
(C) Fixed Assets
(D) Reserve Capital
Answer:
(A) Paid-up Capital

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 52.
Amount of calls in Arrear is :
(A) Added to capital
(B) Deducted from share capital
(C) Shown on the assets side
(D) Shown an the equity and liability side
Answer:
(B) Deducted from share capital

Question 53.
Discount allowled on reissue of forfeited shares is debited to:
(A) Share Capital A/c
(B) Share Forfeiture A/c
(C) Profit & Loss A/c
(D) General Reserve A/c
Answer:
(B) Share Forfeiture A/c

Question 54.
A company has…………
(A) Separate Legal Entity
(B) Perpetual Existence
(C) Limited Liability
(D) All the above
Answer:
(D) All the above

Bihar Board 12th Accountancy Objective Answers Chapter 6 Accounting for Share Capital

Question 55.
The liability of members in a company is :
(A) Limited
(B) Unlimited
(C) Stable
(D) Fluctuating
Answer:
(A) Limited

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