Check Issue, Forfeiture and Reissue of Shares Questions for practice in our education section on e akhabaar
Company Accounts – Issue of shares questions, forfeiture and reissue of shares:
Ques. Public limited companies cannot issue __
(a) equity shares
(b) deferred shares
(c) preference shares
(d) right shares
Ans. (b)
Ques. ___ shares are repayable after the expiry of the fixed period or at the option of the company.
(a) Participating
(b) Convertible
(c) Cumulative
(d) Redeemable
Ans. (d)
Ques. Credit balance left on forfeited shares is transferred to
(a) General reserve account
(b) Capital reserve account
(c) Share premium account
(d) Share capital account
Ans. (b)
Ques. Share application account is a __
(a) nominal
(b) real
(c) personal
(d) none of these
Ans. (c)
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Ques. Conversion of physical shares in to electronic securities is called __
(a) dematerialization
(b) price rigging
(c) re-materialization
(d) none of these
Ans. (a)
Ques. Issue of preference shares is
(a) Cash flow from Operating activities
(b) Cash flow from Financing activities
(c) Cash flow from Investing activities
(d) Cash flow from Commercial activities
Ans. (b)
Ques. IPO stands for ___
(a) Initial Private Offer
(b) International Public Offer
(c) Initial Public Offer
(d) International Private Offer
Ans. (c)
Ques. Preference shareholders are __ of the company
(a) creditors
(b) owners
(c) customers
(d) borrowers
Ans. (b)
Ques. The rate of discount on issue of shares should not exceed __ % of the nominal value of shares.
(a) 10
(b) 2
(c) 4
(d) 5
Ans. (a)
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Ques. Right shares are those shares which are issued to
(a) directors
(b) promoters
(c) existing shareholders
(d) none of these
Ans. (c)
Ques. Which of the following statement is not correct?
(a) Discount on issue of shares is the excess of nominal value over issue price
(b) Discount on issue of shares should be shown in the assets side of balance sheet
(c) In case of forfeiture of shares, discount on forfeited shares should be debited
(d) In case of forfeiture of shares, amount already received should be credited to Share forfeiture account
Ans. (c)
Ques. Share application account is a ___
(a) Real Account
(b) Nominal Account
(c) Impersonal Account
(d) Personal Account
Ans. (d)
Ques. After completing __ years a company can issue shares at discount.
(a) 2
(b) 3
(c) 1
(d) 4
Ans. (c)
Ques. The profit on reissue of shares is transferred to __
(a) general reserve
(b) capital reserve
(c) P/L Account
(d) P/L Appropriation account
Ans. (b)
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Ques. When shares are forfeited, share capital account is debited by __ paid up
(a) amount of shares
(b) called up amount of shares
(c) face value of shares
(d) uncalled capital
Ans. (b)
Ques. Issue of equity shares for providing know-how or making available intellectual property rights is known as
(a) Issue of bonus shares
(b) Issue of sweat shares
(c) Issue of rights shares
(d) Issue of convertible shares
Ans. (b)
Ques. Balance of forfeited share is …….
(a) Revenue Reserve
(b) Capital Reserve
(c) Secret Reserve
(d) Security Premium
Ans. (b)
Ques. Voluntary return of shares by shareholders to the company for cancellation is called
(a) transfer of shares
(b) forfeiture of shares
(c) surrender of shares
(d) buyback of shares
Ans. (c)
Ques. Stock is a consolidation of __ Shares.
(a) partly paid shares
(b) fully paid shares
(c) equity shares
(d) Sweat shares
Ans. (b)
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Ques. Preference share holders are entitled to a fixed rate of __
(a) interest
(b) dividend
(c) coupon
(d) capital
Ans. (b)
Ques. The amount received in excess of face value of share is transferred to
(a) Share capital account
(b) Share redemption account
(c) Share premium account
(d) Share call account
Ans. (c)
Ques. The forfeited shares can be reissued at …………
(a) Par
(b) Premium
(c) Discount
(d) All of these
Ans. (d)
Ques. Those preference shares which do not carry the right of share in excess profits are known as __ preference shares.
(a) irredeemable
(b) non-cumulative
(c) non –convertible
(d) non-participating
Ans. (b)
Ques. Forfeiture of shares results in compulsory termination of __ due to non payment of allotment/call money.
(a) allotment
(b) membership
(c) subscription
(d) issue
Ans. (b)
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Ques. On forfeiture of shares, which of the following account is credited with the amount of money already received on such shares?
(a) shares forfeited a/c
(b) share capital a/c
(c) unpaid calls a/c
(d) share premium a/c
Ans. (a)
Ques. Which of the following is not concerned with equity shares?
(a) Ownership
(b) Fixed rate of dividend
(c) Voting power
(d) Rights Issue
Ans. (b)
Ques. The allotment of shares in case of oversubscription is called…..
(a) Pro‐rata allotment
(b) Private Placement
(c) Offer for sale
(d) None of these
Ans. (a)
Ques. The discount on re-issue of forfeited shares is debited to __ a/c
(a) share capital
(b) shares forfeited
(c) bank
(d) discount on issue of shares
Ans. (b)
Ques. __ implies issue and allotment of shares to a selected group of persons and not to general public
(a) initial public offer
(b) right issue
(c) private placement
(d) pre-emptive right
Ans. (c)
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Ques. Right shares are issued to __
(a) directors
(b) promoters
(c) existing share holders
(d) debenture holders
Ans. (b)
Ques. Shares which carry preferential rights are called __
(a) equity shares
(b) preference shares
(c) sweaty equity
(d) green shoe
Ans. (b)
Ques. A bundle of fully paid shares is called___.
(a) Stock
(b) Sweat Equity
(c) Warrant
(d) None of these
Ans. (a)
Ques. A company cannot issue redeemable preference shares for a period exceeding __
(a) 6 years
(b) 7years
(c) 10 years
(d) 20 years
Ans. (d)
Ques. Preference shares can be redeemed __
(a) If they are fully paid up
(b) if they are partly paid up
(c) if they are convertible
(d) None of these
Ans. (a)
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Ques. Premium on redemption of preference shares can be provided out of __
(a) securities premium account
(b) capital reserve account
(c) general reserve account
(d) all of these
Ans. (d)
Ques. Which of the following is not a source of redemption of preference shares?
(a) divisible profit
(b) securities premium a/c
(c) realization of asset
(d) proceeds of fresh issue
Ans. (c)
Ques. The shares of a company can be issued at ___.
(a) Par
(b) Premium
(c) Discount
(d) All of these
Ans. (d)
Ques. The nominal value of preference shares to be redeemed can be provided out of __
(a) general reserve
(b) capital reserve
(c) CRR
(d) securities premium
Ans. (a)
Ques. Redemption of preference shares should not be regarded as reduction of —– capital of the company.
(a) paid-up
(b) called-up
(c) subscribed
(d) authorized
Ans. (d)
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Ques. Under the scheme of buyback of shares , the company in order to perform its obligations , is required to open an ….account
(a) fixed deposit
(b) escrow deposit
(c) savings deposit
(d) current deposit
Ans. (b)
Ques. The shares firstly offered to the existing shareholders are called as ___
(a) Right shares
(b) Bonus shares
(c) Ordinary shares
(d) None of these
Ans. (a)
Ques. Which of the following reserves cannot be distributed as dividend to share holders?
(a) securities premium
(b) profit on forfeiture of shares
(c) profit on sale of fixed assets
(d) all of these
Ans. (d)
Ques. For amalgamation in the nature of merger, the shareholders holding at least or more of the equity shares of the transferor company becomes the equity shareholders of the transferee company.
(a) 90%
(b) 80%
(c) 100%
(d) none of these
Ans. (a)
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Ques. When shares are issued at a price higher than their face value, it is called issue at___.
(a) Par
(b) Premium
(c) Discount
(d) None of these
Ans. (b)
Ques. Discount on reissue of forfeited shares should not exceed ___
(a) Amount forfeited
(b) Face value
(c) Issued price
(d) Market price
Ans. (a)
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