Company Accounts Questions

Which of the following will be credited for the excess amount received along with allotment money from the shareholders?

Calculate the amount of Dividend paid during the year 2022 from the following information:Balance of Proposed Dividend as on 31st March, 2021 was Rs. $40,000$ and on 31st March, 2022 Rs. $60,000$. Interim Dividend was paid @$20\%$ on share capital. Share capital was Rs. $4,00,000$.

Which of the following indicates the other name of 'Nominal Capital'?

Arrange the following steps as per the procedure of issue of shares:(a) Receipt of applications(b) Allotment of shares(c) Reissue of forfeited shares(d) Issue of prospectus(e) Forfeiture of sharesChoose the correct answer from the options given below:

What does 'E' stand for in ESOP?

Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems faced by firm, like many industries were facing. Due to their past reputation they could manage the permission from SEBI for issuing of shares on 1 Aug, 2022. They also decided to issue $12\%$ Debentures of Rs. $100$ each at $10\%$ Discount and were to be redeemed at $25\%$ premium in such a way that they could arrange fund of Rs. $45,00,000$. At the time of issue of Debenture they also issued equity Share of Rs. $30,00,000$ at $20\%$ premium.Interest payable on the Debentures issued for the year ended Mar, 31st 2023 will be:

In which order, the share capital of the Company is shown on the balance sheet:(A) Authorized Capital
(B) Subscribed and fully paid up Capital
(C) Issued Capital
(D) Subscribed but not fully paid upChoose the correct answer from the options given below:

Raj Ltd. was registered with $70,000$ equity shares. They issued $40,000$ equity shares @ $10$ each payable as follow :On Application Rs. $4$ per shareOn Allotment Rs. $3$ per shareand Balance on $2$ callsThe issue was over subscribed by $50,000$ shares. The directors decided upon making prorata allotment to $60,000$ shares while remaining were returned.The amount to be adjusted with the call of allotment will be :

Which of the following is incorrect about the minimum subscription?Minimum subscription is the minimum amount that, in the opinion of directors, must be raised to meet the needs of business operations of the company relating to:

Arrange the following steps in correct sequence with regard to Shares of a company.(A) Making Calls(B) Forfeiture of Shares(C) Issue of Prospectus(D) Calls in Arrears(E) Reissue of SharesChoose the correct answer from the options given below:

Which statements are correct about capital reserve?(A) It is necessary to create capital reserves out of capital profits, if any.
(B) It cannot be used to issue bonus shares.
(C) It can be used to write off capital losses or to issue bonus shares any time during the lifetime of the company.
(D) It is not shown on the company balance sheet.Choose the correct answer from the options given below:

MNO Ltd. forfeited 1,000 shares of Rs. 10 each on which shareholders had paid only application money of Rs. 3 per share. Out of these, 400 equity shares were reissued as fully paid for Rs. 9 per share. The gain on reissue of shares transferred to Capital reserve is:

The debentures which are payable on the expiry of the specific period are:

The paid up share capital of "One Person Company" cannot be more than:

Part of the subscribed capital which has been called up on the shares, i.e., what the company has asked the shareholders to pay is known as __________.

Securities premium Reserve can be utilised ___A. to return excess money received on applicationB. to write off preliminary expensesC. to issue partly paid bonus sharesD. for premium paid on Redemption of Debentures or preference sharesE. for buy back of sharesChoose the correct answer from the options given below:

There must be an interval of how many months between the making of two calls unless otherwise provided by the articles of association of the company?

Redemption of Debenture can be done by many ways. Identify the wrong option.

If a delay occurs beyond 8 days from the date of closure of the subscription list in refunding the amount received due to non-fulfilment of the criteria of minimum subscription, the company shall be liable to pay the amount with interest at the rate of:

If a share of Rs. 100 on which Rs. 45 has been paid is forfeited, at what minimum price can it be reissued:

At the time of forfeiture, the share capital account is:

According to regulatory guidelines, receiving the minimum subscription of $90\%$ of the entire public issue must be completed within how many days from the date of issue of the prospectus?

According to Sec 2 (62) of Companies Act, 2013, the maximum amount of paidup share capital of an OPC is:

Blue Prints Ltd. purchased a building worth Rs. $1,50,000$, Machinery worth Rs. $1,40,000$ and Furniture worth Rs. $10,000$ from XYZ Co. and took over its liabilities of Rs. $20,000$ for a purchase consideration of Rs. $3,15,000$.Calculate the Goodwill/Capital Reserve to be recorded by Blue Print Ltd.

Equity shareholders are..................of the company:

When a company reserves a specific portion of its uncalled capital to be called up only in the event of liquidation or winding up, this capital is known as:

Arrange the following categories of capital in the correct hierarchical sequence (from largest/first to narrowest):(A) Called-up capital(B) Subscribed capital(C) Issued capital(D) Paid-up capitalChoose the correct answer from the options given below:

X Ltd. purchased assets from Y Ltd. for ₹98,10,000. X Ltd. issued 12% Debentures of ₹100 each at a 10% discount against the payment. The number of debentures issued to Y Ltd. is:

Which of the following statements about share capital is TRUE?(A) A company's shares are generally transferable.(B) Share application account is a personal account.(C) The part of capital which is called up only on winding up of a company is called reserve capital.(D) Paid up capital can exceed called up capital.Choose the correct answer from the options given below:

\textbf{Case Study Description:}Review the share allotment data for Eicher Ltd. to answer the questions:Eicher Ltd. issued $50,000$ equity shares of $\text{Rs. }10$ each at a premium of $\text{Rs. }5$ per share, payable as follows:\begin{itemize}\item On Application: $\text{Rs. }3$ per share\item On Allotment: $\text{Rs. }5$ per share (including $\text{Rs. }3$ Premium)\item On First Call: $\text{Rs. }5$ per share (including $\text{Rs. }2$ Premium)\item On Final Call: Balance amount\end{itemize}Applications were received for $72,000$ shares. The Directors allotted $50,000$ shares on a pro-rata basis to applicants who applied for $65,000$ shares, rejecting the remaining applications. The excess application money received was adjusted against the amount due on allotment. All amounts due were received except for the first call from Rahul, who had applied for $2,600$ shares. His shares were forfeited immediately after the non-payment of the first call. These forfeited shares were later reissued at the minimum possible reissue price.Identify the ratio in which the shares were allotted on a pro-rata basis:

A minimum of ______ days' notice is to be given to the shareholders to pay the amount of any call:

All of them are shown under the sub-heading 'Reserve and Surplus' except :

According to the Companies Act 2013, while issuing shares, the application money should be at least ______ of the face value of the share.

\textbf{Case Study Description:}Review the share allotment data for Eicher Ltd. to answer the questions:Eicher Ltd. issued $50,000$ equity shares of $\text{Rs. }10$ each at a premium of $\text{Rs. }5$ per share, payable as follows:\begin{itemize}\item On Application: $\text{Rs. }3$ per share\item On Allotment: $\text{Rs. }5$ per share (including $\text{Rs. }3$ Premium)\item On First Call: $\text{Rs. }5$ per share (including $\text{Rs. }2$ Premium)\item On Final Call: Balance amount\end{itemize}Applications were received for $72,000$ shares. The Directors allotted $50,000$ shares on a pro-rata basis to applicants who applied for $65,000$ shares, rejecting the remaining applications. The excess application money received was adjusted against the amount due on allotment. All amounts due were received except for the first call from Rahul, who had applied for $2,600$ shares. His shares were forfeited immediately after the non-payment of the first call. These forfeited shares were later reissued at the minimum possible reissue price.Determine the amount to be transferred to the Capital Reserve Account upon the reissue of Rahul's shares:

A debenture which is transferable merely by physical delivery is a:

Securities Premium Reserve can be used to:A. Issue new shares to existing shareholdersB. Write off Preliminary expensesC. Writing off of GoodwillD. Premium on Redemption of debenturesE. Issue fully paid Bonus SharesChoose the correct answer from the options given below:

\textbf{Case Study Description:}Review the share allotment data for Eicher Ltd. to answer the questions:Eicher Ltd. issued $50,000$ equity shares of $\text{Rs. }10$ each at a premium of $\text{Rs. }5$ per share, payable as follows:\begin{itemize}\item On Application: $\text{Rs. }3$ per share\item On Allotment: $\text{Rs. }5$ per share (including $\text{Rs. }3$ Premium)\item On First Call: $\text{Rs. }5$ per share (including $\text{Rs. }2$ Premium)\item On Final Call: Balance amount\end{itemize}Applications were received for $72,000$ shares. The Directors allotted $50,000$ shares on a pro-rata basis to applicants who applied for $65,000$ shares, rejecting the remaining applications. The excess application money received was adjusted against the amount due on allotment. All amounts due were received except for the first call from Rahul, who had applied for $2,600$ shares. His shares were forfeited immediately after the non-payment of the first call. These forfeited shares were later reissued at the minimum possible reissue price.Before a company can legally forfeit a shareholder's shares for non-payment of calls, which corporate body is authorized and required to issue the formal forfeiture notice?

Which of the following statements about debentures is FALSE?(A) Debenture is a part of owned capital.(B) Debentures cannot be converted into shares.(C) Redeemable debentures are those debentures, which are payable on the expiry of the specific period.(D) Debentures cannot be issued at a premium.Choose the correct answer from the options given below:

According to 'Table F' of Schedule I of Companies Act 2013, interest on calls-in-arrears is charged at a maximum rate of:

A share having a face value of $\text{Rs. }12$, on which $\text{Rs. }10$ is called-up and $\text{Rs. }8$ is paid, is forfeited. State the amount with which the Share Capital account will be debited.

Correct sequence of issue of shares is -A. Receipt of ApplicationB. Issue of ProspectusC. Letter of Allotment of SharesD. Letter of RegretChoose the correct answer from the options given below:

When the purchase consideration is more than the value of net assets taken over, the difference will be debited to:

The net balance of the Share Forfeiture Account is presented in the Balance Sheet under which item?

Match List-I with List-IIList-IList-II(A) Calls in advance(I) The maximum number of members is 200.(B) Calls in arrears(II) $12\%$ interest p.a.(C) Private company(III) $10\%$ interest p.a.(D) Public company(IV) No limit on the maximum number of members.Choose the correct answer from the options given below:

According to Section 52(2) of the Companies Act, 2013, the amount of Securities Premium can be used only for the following purposes:(A) To write off preliminary expenses.(B) To make partly paid shares as fully paid up.(C) To issue fully paid bonus shares.(D) Purchase of its own shares (Buyback).Choose the correct answer from the options given below:

Which of the following is NOT a characteristic of a corporate company structure?

Identify the steps of the procedure of share issue in the correct sequence:(A) Allotment of Shares(B) Receipt of Applications(C) Issue of Prospectus(D) Share CallChoose the correct answer from the options given below:

$\text{Rs }50,000$ were received in advance for the second and final call along with the first call. The second and final call was due after two months from the first call. Table F (formerly Table A) provides for interest on calls in advance at a rate not exceeding _____ per annum, and the calculated interest on calls in advance for this period amounted to $\text{Rs }..........$

Which of the following statements are correct?(A) A company is an artificial person.(B) Company's shares are generally transferable.(C) Paid-up capital can exceed called-up capital.(D) The part of capital which is called up only on winding up is called reserve capital.Choose the correct answer from the options given below:

Match List-I with List-II:List-IList-II(A) Debenture of Rs 100 issued at Rs 110(I) Debenture as collateral security(B) Debenture of Rs 100 issued at Rs 100(II) Debenture issued at Premium(C) Debenture of Rs 100 issued at Rs 90(III) Debenture issued at par(D) Debenture issued to the lender in addition to some other assets already pledged(IV) Debenture issued at DiscountChoose the correct answer from the options given below:

Case Study Information:Moonrise Co. is authorized with a Share Capital of ₹5,00,000. It issued 10,000 equity shares of ₹12 each (Face Value ₹10 + Premium ₹2).The money was payable as:₹4 on Application₹4 on Allotment (including premium of ₹2)₹4 on 1st and final callApplications were received for 12,000 shares and the directors decided to make a pro-rata allotment. Mr. Rashidi, an applicant for 120 shares, failed to pay the allotment and call money. Mr. Shantanu, a holder of 200 shares, failed to pay the call money. All these shares were forfeited. Out of the forfeited shares, 150 shares (including all of Rashidi's shares) were reissued at ₹8 per share.Question: The total amount of Securities Premium Reserve credited at the time of the allotment of shares will be:

Blue Prints Ltd. purchased a building worth $\text{Rs. }1,50,000$, machinery worth $\text{Rs. }1,40,000$, and furniture worth $\text{Rs. }10,000$ from XYZ Co., and took over its liabilities of $\text{Rs. }20,000$ for a total purchase consideration of $\text{Rs. }3,15,000$. Blue Prints Ltd. settled the purchase consideration by issuing $12\%$ debentures of $\text{Rs. }100$ each at a premium of $5\%$. The number of debentures issued is:

Which section of the Indian Companies Act, 2013 clarifies the legal classification of share capital into Equity shares and Preference shares?

The net profit realized from the reissue of forfeited shares is transferred to which of the following accounts?

The directors of a company forfeited $400$ equity shares of Rs. $10$ each fully called up on which Rs. $1,600$ had been paid. All the forfeited shares were reissued upon payment of Rs. $3,000$. Calculate the amount transferred to Capital Reserve

Match List-I with List-II:List-IList-II(A) Interest on calls in arrears(I) Preference Shares(B) Interest on calls in advance(II) OPC (One Person Company)(C) Sec. 2(62) of The Companies Act, 2013 defines(III) 12%(D) Sec. 43 of The Companies Act, 2013 defines(IV) 10%Choose the correct answer from the options given below:

Shares can be forfeited:

The balance in the securities premium account cannot be used for which of the following purposes?

Case Study Information:Moonrise Co. is authorized with a Share Capital of ₹5,00,000. It issued 10,000 equity shares of ₹12 each (Face Value ₹10 + Premium ₹2).The money was payable as:₹4 on Application₹4 on Allotment (including premium of ₹2)₹4 on 1st and final callApplications were received for 12,000 shares and the directors decided to make a pro-rata allotment. Mr. Rashidi, an applicant for 120 shares, failed to pay the allotment and call money. Mr. Shantanu, a holder of 200 shares, failed to pay the call money. All these shares were forfeited. Out of the forfeited shares, 150 shares (including all of Rashidi's shares) were reissued at ₹8 per share.Question: The shares are reissued at a:

Match List-I with List-II:List-I (Feature)List-II (Description)(A) Separate Legal Entity(I) A company being a legal person can enter into contracts and can enforce the contractual rights against others.(B) Perpetual Succession(II) It can hold and deal with any type of property, it can enter into contracts and even open a bank account in its own name.(C) Common Seal(III) The company being an artificial person created by law continues to exist irrespective of the changes in its membership.(D) May Sue or be Sued(IV) The company being an artificial person, cannot sign its name by itself.Choose the correct answer from the options given below:

Match List-I with List-II:List-IList-II(A) Authorised Capital(I) Capital which is actually issued to the public for subscription including the shares allotted to vendors and the signatories to the company's memorandum.(B) Issued Capital(II) It is that part of the subscribed capital which has been called up on the shares, i.e., what the company has asked the shareholders to pay.(C) Subscribed Capital(III) The amount of share capital which a company is authorised to issue by its Memorandum of Association.(D) Called up Capital(IV) It is that part of the issued capital which has been actually subscribed by the public.Choose the correct answer from the options given below:

Forfeiture of shares results in the reduction of :

Match List-I with List-II:List-IList-II(A) Redeemable Debentures(I) The debentures which can be transferred by way of delivery and the company does not keep any record of the debentures(B) Convertible Debentures(III) These debentures are issued with a specified rate of interest(C) Specific Coupon Rate Debentures(III) Which are convertible into equity shares or in any other security either at the option of the company or the debentureholders(D) Bearer Debentures(IV) Which are payable on the expiry of the specific period either in lump sum or in instalments during the life time of the company.Choose the correct answer from the options given below:

Select the pair which is true about debentures:(A) Debenture is a part of owned capital.(B) The payment of interest on debentures is a charge on the profits of the company.(C) The debentures cannot be issued at a discount of more than 10% of the face value.(D) Redeemable debentures are those debentures, which are payable on the expiry of the specific period.Choose the correct answer from the options given below:

Arrange the following stages of share capital transactions in their correct chronological operational sequence:(A) Share Allotment(B) Share Application(C) Share forfeiture(D) Share CallChoose the correct answer from the options given below:

X Limited Issued $10,000$, $12\%$ debentures of $\text{Rs. }100$ each payable $\text{Rs. }40$ on application and $\text{Rs. }60$ on allotment. The public applied for $14,000$ debentures. Applications for $9,000$ debentures were accepted in full, applications for $2,000$ debentures were allotted $1,000$ debentures and the remaining applications were rejected. All money was duly received. The $12\%$ Debenture Application A/c will be credited with:

Case Study Information (Questions 46-50):Moonrise Co. is authorized with a Share Capital of ₹5,00,000. It issued 10,000 equity shares of ₹12 each (Face Value ₹10 + Premium ₹2).The money was payable as:₹4 on Application₹4 on Allotment (including premium of ₹2)₹4 on 1st and final callApplications were received for 12,000 shares and the directors decided to make a pro-rata allotment. Mr. Rashidi, an applicant for 120 shares, failed to pay the allotment and call money. Mr. Shantanu, a holder of 200 shares, failed to pay the call money. All these shares were forfeited. Out of the forfeited shares, 150 shares (including all of Rashidi's shares) were reissued at ₹8 per share.Question: The Balance Sheet of the company will show the authorized capital of the company as:

Nominal share capital is defined as:

Sahil, a shareholder, failed to pay the second and final call of $\text{Rs. }20$ on $1,000$ shares issued to him at $\text{Rs. }120$ per share (face value of $\text{Rs. }100$ per share). His shares were forfeited after the final call deadlines passed. Which statement is correct regarding the Share Forfeiture Account?

Under which sub-head in the balance sheet does the balance of the share forfeiture account appear?

The following journal entry appears in the books of X Co. Ltd.:
$$\begin{array}{llcc}\text{Bank A/c}& \text{Dr.}& 4,75,000& \\ \text{Loss on issue of debenture A/c}& \text{Dr.}& 75,000& \\ \text{To }12\%\text{ Debentures A/c}& & & 5,00,000\\ \text{To Premium on Redemption of Debenture A/c}& & & 50,000\end{array}$$
Based on this entry, the debentures have been issued at a discount rate of:

The money received from applicants to whom no debentures have been allotted will be ________

Which of the following statements are correct in relation to the issue of share capital for public subscription?(A) The application money should be at least 5% of the face value of the share.(B) Calls are to be made as per the provisions of the articles of association.(C) Where there is no articles of association of its own, the provisions of Table F (or Table A of earlier acts) will apply.(D) Calls need not be made on a uniform basis on all shares within the same class.Choose the correct answer from the options given below:

ABC Ltd. issued $3,000$, $14\%$ Debentures of $\text{Rs. }100$ each at a discount of $5\%$ on April 1, 2023. What is the total discount amount on the issue of these debentures?

A company purchases its own shares of Rs. $5,00,000$ from the market. What is this process called?

Arrange the following events (in relation to the issue of shares) in a logical order.(A) Transfer to capital reserve.(B) Forfeiture of share.(C) Calls in arrears.(D) Re-issue of share.Choose the correct answer from the options given below:

Which combination of following statements are Incorrect (False) about debentures-(A) Debenture is a part of owned capital.(B) The payment of interest on debentures is a charge on the profits of the company.(C) The debentures cannot be issued at a discount of more than 10% of the face value.(D) Debentures cannot be converted into shares.(E) Redeemable debentures are those debentures, which are payable on the expiry of the specific period.Choose the correct answer from the options given below:

When debentures are issued at premium with the term of redeeming them at par. The amount of premium received at the time of issue will be:

According to the provisions of SEBI guidelines and the historical timelines of the Companies Act, a company must secure its minimum subscription within how many days from the date of opening the issue?

In a Journal Entry of Forfeiture of Shares, Share Capital Account will be :-

Excess value of net assets over purchase consideration at the time of purchase of business is credited to

The account which is not used in journal entry of the forfeiture of shares is:

Which of the following statements are wrong about debentures?(A) Debenture is a part of owned capital.(B) The debentures cannot be issued at a discount of more than 10% of the face value.(C) Debentures cannot be converted into shares.(D) Redeemable debentures are those debentures, which are payable on the expiry of a specific period.Choose the correct answer from the options given below:

When debentures are issued at par and are redeemable at a premium, the extra amount payable at redemption is recorded at the time of issue by debiting which account?

Choose the correct statement :-

High Light India Ltd. invited applications for 30,000 Shares of Rs. 100 each at a premium of Rs. 20 per share payable as follows:On Application Rs. 40 (including Rs.10 premium)On Allotment Rs. 30 (including Rs.10 premium)On First Call Rs. 30On Second and Final Call Rs. 20 Applications were received for 40,000 shares and pro-rata allotment was made on the application for 35,000 share. Excess application money was utilised towards allotment.Rohan to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited immediately after allotment.Aman who applied for 1,050 shares failed to pay first call and his share were forfeited immediately after first Call.Second and final call was made. All the money due on second call have been received.Of the shares forfeited, 1,000 share were reissued as fully paid-up for Rs. 80 per share, which included the whole of Aman's shares. Allotment money received in advanced alongwith application is _______________

Who from the following regularly attends the office of a company?

Which is not a type of Debenture :-

High Light India Ltd. invited applications for 30,000 Shares of Rs. 100 each at a premium of Rs. 20 per share payable as follows:On Application Rs. 40 (including Rs.10 premium)On Allotment Rs. 30 (including Rs.10 premium)On First Call Rs. 30On Second and Final Call Rs. 20 Applications were received for 40,000 shares and pro-rata allotment was made on the application for 35,000 share. Excess application money was utilised towards allotment.Rohan to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited immediately after allotment.Aman who applied for 1,050 shares failed to pay first call and his share were forfeited immediately after first Call.Second and final call was made. All the money due on second call have been received.Of the shares forfeited, 1,00,0 share were reissued as fully paid-up for Rs. 80 per share, which included the whole of Aman's shares. Rohan to whom 600 shares were allotted must have applied for:

Profit on reissue of shares is transferred to

Match List-I with List-II:List-IList-II(A) Unregistered Debentures(I) Perpetual Debentures(B) Unsecured Debentures(II) Naked Debentures(C) Secured Debentures(III) Bearer Debentures(D) Irredeemable Debentures(IV) Mortgage DebenturesChoose the correct answer from the options given below:

Uncalled capital that can be called up only in event of winding up of the company is called :

Match List I with List IILIST I: Basis of DebentureA. TenureB. Interest rate point of viewC. SecurityD. BearerLIST II: Types of DebentureI. Zero coupon rateII. IrredemableIII. RegistrationIV. SecuredChoose the correct answer from the options given below:

What is the correct sequence of types of capital in company's Balance sheet while preparing notes to accounts.A. Issued CapitalB. Subscribed and fully paid up capitalC. Share forfeited BalanceD. Authorised CapitalE. Subscribed but not fully paid up capital Choose the correct answer from the options given below:

What are different types of debentures from the view point of registration A. ConvertibleB. BearerC. RedeemableD. SecuredE. Registered Choose the correct answer from the options given below:

An issue of shares made by the company to the public in general for subscription is called :

Which A/c is credited for transfer of interest on Debenture Redemption Fund Investment?

Case Study Information:Moonrise Co. is authorized with a Share Capital of ₹5,00,000. It issued 10,000 equity shares of ₹12 each (Face Value ₹10 + Premium ₹2).The money was payable as:₹4 on Application₹4 on Allotment (including premium of ₹2)₹4 on 1st and final callApplications were received for 12,000 shares and the directors decided to make a pro-rata allotment. Mr. Rashidi, an applicant for 120 shares, failed to pay the allotment and call money. Mr. Shantanu, a holder of 200 shares, failed to pay the call money. All these shares were forfeited. Out of the forfeited shares, 150 shares (including all of Rashidi's shares) were reissued at ₹8 per share.Question: The amount of Securities Premium Reserve to be debited at the time of forfeiture of shares will be:

Which of the following debentures do not have a specific charge on the assets of the company?

The balance of the Share Forfeiture Account is disclosed in the company's Balance Sheet under which sub-head?