Online Test — Company Accounts: Accounting for Share Capital
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
A company has a separate ____ from its members.
Bank account only
Legal entity
Address
Logo
Explanation: A company is a separate legal entity.
Question 2 of 15
Shares with a fixed dividend paid before equity shares are:
Equity shares
Preference shares
Bonus shares
Deferred shares
Explanation: Preference shares get a fixed dividend first.
Question 3 of 15
The maximum capital a company can raise is its ____ capital.
Paid-up
Authorised
Called-up
Subscribed
Explanation: Authorised (nominal) capital is the maximum.
Question 4 of 15
The part of issued capital applied for by the public is ____ capital.
Authorised
Subscribed
Paid-up
Reserve
Explanation: Subscribed capital is what the public applies for.
Question 5 of 15
The amount actually received against called-up capital is ____ capital.
Issued
Paid-up
Authorised
Nominal
Explanation: Paid-up capital is the amount received.
Question 6 of 15
The excess of issue price over face value is the:
Discount
Securities premium
Dividend
Call
Explanation: The excess is the securities premium.
Question 7 of 15
Securities premium is credited to:
Share Capital A/c
Securities Premium Reserve A/c
Bank A/c
Calls A/c
Explanation: It goes to the Securities Premium Reserve A/c.
Question 8 of 15
Money received on application is recorded as:
Bank A/c Dr; To Share Application A/c
Share Application A/c Dr; To Bank
Share Capital A/c Dr
Cash A/c Dr; To Capital
Explanation: Bank is debited; Share Application credited.
Question 9 of 15
Issuing shares at a discount is generally:
Allowed freely
Prohibited (except sweat equity)
Compulsory
Tax-free
Explanation: Section 53 prohibits it except sweat equity.
Question 10 of 15
More applications than shares issued is called:
Under-subscription
Over-subscription
Forfeiture
Allotment
Explanation: Over-subscription = applications exceed shares offered.
Question 11 of 15
An amount called but unpaid is:
Calls-in-advance
Calls-in-arrears
Premium
Reserve
Explanation: Unpaid called amount = calls-in-arrears.
Question 12 of 15
An amount paid before being called is:
Calls-in-arrears
Calls-in-advance
Dividend
Premium
Explanation: Prepaid call = calls-in-advance (a liability).
Question 13 of 15
Cancelling shares for non-payment of calls is:
Re-issue
Forfeiture
Allotment
Buy-back
Explanation: Forfeiture cancels the defaulter's shares.
Question 14 of 15
On re-issue, the balance of the Forfeited Shares A/c goes to:
Capital Reserve
Securities Premium
Bank
Drawings
Explanation: Any balance left is transferred to Capital Reserve.
Question 15 of 15
Rs 6 received on a Rs 10 forfeited share, re-issued at Rs 8. Capital Reserve =
Rs 4
Rs 2
Rs 6
Rs 8
Explanation: Forfeited 6 − re-issue discount 2 = 4 to Capital Reserve.