Table of Contents

Issue of Shares MCQs With Solved Answer

Issue Of Shares MCQs with Solved answer (Question 1 to5)

Issue of Shares MCQs With Solved Answer-

1.Ordinary shares are also called-
(a) Equity shares

(b) Founder’s shares
(c) Deferred shares

(d) Preference shares

2.The maximum amount with which the company is registered is called-
(a) Authorized Share Capital

(b) Issued Share Capital
(c) Subscribed capital

(d) Called up capital

3. When shares are issued at premium amount of premium will be credited to–
(a) Securities premium account

(b) Share first call account
(c) Share allotment account

(d) Share forfeited account

4.Minimum number of members in case of public company is-
(a) 4

(b) 5
(c) 6

(d) 7

5. Maximum number of members in public limited company is –
(a) 10

(b) 20
(c) 50

(d) unlimited

Answer – Question Number 1 To 5

1.Answer- (a) Equity shares

2.Answer- (a) Authorized Share Capital

3.Answer- (a) Securities premium account

4.Answer- (d) 7

5.Answer- (d) unlimited

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Issue Of Shares MCQs with Solved answer (Question 6 to10)

6.Minimum number of members in case of private company is-
(a) 2

(b) 5
(c) 6

(d) 7

7. Maximum number of members in case of private company is-
(a) 100

(b) 200
(c) 500

(d) unlimited

8.The forfeited shares can be reissued at-
(a) Par

(b) Premium
(c) Discount

(d) All of them

9.Normal shares can be issued at-
(a) Par

(b) Premium
(c) Discount

(d) a and b

10. The portion of the authorised capital which can be called up only on the liquidation of the company is called-

(a) Authorized Share Capital

(b) Issued Share Capital
(c) Subscribed capital

(d) Reserve capital

Answer – Question Number 6 To 10

6.Answer- (a) 2

7.Answer- (b) 200

8.Answer- (d) All of them

9.Answer- (d) a and b

10.Answer- (d) Reserve capital

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Issue Of Shares MCQs with Solved answer (Question 11 to15)

11.Share application account is a-
(a) personal account

(b) Real account
(c) Nominal account

(d) Impersonal account

12.Share allotment account is a-
(a) personal account

(b) Real account
(c) Nominal account

(d) Impersonal account

13. A company forfeited 200 shares of ₹10 each (which were issued at par) held by Mr. Loya for non-payment of allotment money of ₹4 per share. The called-up value per share was ₹9. On forfeiture, the amount debited to share capital will be
(a) ₹10,000
(b) ₹8,000
(c) ₹2,000
(d) ₹1,800

14. Aarav to whom 1000 shares of ₹10 each was allotted at par, paid ₹3 on application, ₹3 on allotment but could not pay the first and final call money of ₹4. His shares were forfeited by the directors. The amount to be credited to shares forfeited account will be-
(a) Rs.5,000
(b) Rs.4,000
(c) Rs.6,000
(d) Rs.1,000

15. Vikram Ltd. Issued 20,000 Equity shares of Rs. 10 each at a premium
of Rs. 3 payable as follows: On Application Rs. 4
On Allotment Rs. 5 (including Securities Premium) On First Call Rs. 2 On Final
Call Rs. 2 All shares were duly subscribed and all money duly received. The amount to be credited to securities premium Reserve Account-

(a) Rs.1,00,000
(b) Rs.80,000
(c) Rs.60,000
(d) Rs.40,000

Answer – Question Number 11 To 15

11.Answer- (a) personal account

12.Answer- (a) personal account

13.Answer- (d) Rs.1,800

14.Answer- (c) Rs.6,000

15.Answer- (c) Rs.60,000

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Issue Of Shares MCQs with Solved answer (Question 16 to20)

16. TABA company issued 15,000 fully paid up equity shares of ₹ 100
each for the purchases of the following assets and liabilities from Jay Company.
Plant – ₹3,50,000; Stock ₹ 4,50,000; Land and Building ₹ 6,00,000; Sundry Creditors ₹ 1,00,000. Amount of goodwill will be-

(a) ₹2,00,000
(b) ₹1,80,000
(c) ₹1,60,000
(d) ₹1,40,000

17. Jay Ltd. issued 400 shares of ₹ 10 each to Suresh on which he has paid
₹ 3 per share on application but failed to pay allotment money of ₹3 per
share and first call money of ₹ 2 per share. His shares were forfeited before
making the final call. These shares were later on reissued at ₹8 per share
fully paid up. The amount will be transferred to capital reserve-

(a) ₹ 500
(b) ₹ 400
(c) ₹ 1,200
(d) ₹ 800

18. Vjay Co. Ltd. Purchased a machine from Vishal Co. for Rs. 64,000.
It was decided to pay Rs. 10,000 in cash and balance paid by issue of shares of Rs. 10 each Issued at premium of 20%. No. of shares to be issued to Vishal Co-

(a) 5400
(b) 4500
(c) 6000
(d) None of these

19. Premium on issue of shares is–

(a) Revenue profit
(b) Revenue Loss
(c) Capital Gain
(d) Capital Loss

20. Right shares are issued to–

(a) Directors
(b) Promoters
(c) Existing Shareholders
(d) None of these

Answer – Question Number 16 To 20

16.Answer- (a) ₹2,00,000

17.Answer- (b) ₹ 400

18.Answer- (b) 4500

19.Answer- (c) Capital Gain

20.Answer- (c) Existing Shareholders

Issue Of Shares MCQs with Solved answer (Question 21 to25)

21. Companies with higher growth potential are likely to:

(a) Pay lower dividends

(b) Pay higher dividends

(d) None of the above

22. Premium on issue of shares can be used for –

(a) issue of fully paid bonus shares

(b) Providing for the premium payable on redemption of any redeemable preference shares

(d) In purchasing its own shares ( Buy-back)

(e) All the above.

23. When shares are forfeited, Share Capital Account is debited with-

(a) Nominal value of shares

(b) Called-up value of shares

(d) Market value of shares

24. The loss on reissue of shares is less than the amount forfeited, the surplus is transferred to-

(a) Capital Reserve.

(b) Reserve Capital Account

(d) Assets Account

25. KAKA Company. Ltd. Purchased a machine from PAKA Company. for ₹ 6,40,000. It was decided to pay ₹1,40,000 in cash and balance paid by the issue of shares of Rs. 10 each Issued at par. No. of shares to be issued to PAKA Company-

(a) 5000
(b) 4500
(c) 6000
(d) None of these

Answer – Question Number 21 To 25

21.Answer- (a) Pay lower dividends

22.Answer- (e) All the above.

23.Answer- (b) Called-up value of shares

24.Answer- (a) Capital Reserve.

25.Answer- (a) 5000

Issue Of Shares MCQs with Solved answer (Question 26 to 30)

26. Shareholders are……….. of the company.
(a) Customers of the Company
(b) Owners of the Company
(c) Creditors of the Company
(d) None of these

27. Characteristics of joint stock company are-

(a) A joint stock company is an artificial person

(b) Separate Legal Entity

(d) Limited Liability of Members

(e) All of these

28. A company forfeited 2,000 shares of ₹10 each (which were issued at par) held by Mr. Das for non-payment of allotment money of ₹4 per share. The called-up value per share was ₹8. On forfeiture, the amount debited to share capital will be
(a) ₹10,000
(b) ₹16,000
(c) ₹2,000
(d)₹18,000.

29. X company forfeited 2,000 shares of ₹10 each (which were issued at par) held by Mr. Das for non-payment of allotment money of ₹4 per share .

The amount payable on these shares-

Application money ₹2

Allotment money ₹4

First Call money ₹ 2

Second and final call money ₹ 2.

The called-up value per share was ₹8. On forfeiture, the amount Credited to share forfeiture will be
(a) ₹4,000
(b) ₹16,000
(c) ₹2,000
(d) ₹18,000

30. Those shares which are issued out of accumulated or undistributed profits of the company, free of cost, to the existing shareholders are called-

(a) Bonus shares
(b) Right Shares
(c) Sweat Equity Shares
(d) None of these

Answer – Question Number 26 To 30

26.Answer- (b) Owners of the Company

27.Answer- (e) All of these

28.Answer-(b) Rs.16,000

29.Answer-(a) Rs.4,000

30.Answer- (a) Bonus shares

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Issue Of Shares MCQs with Solved answer (Question 31 to 35)

31. When shares are issued at a price equal to their face value, is called-

(a) Issue of shares at par
(b) Issue of shares at premium
(c) Issue of shares at Dicsount
(d) None of these

32. When shares are issued at a price more than to their face value, is called-

(a) Issue of shares at par
(b) Issue of shares at premium
(c) Issue of shares at Dicsount
(d) None of these

33. The securities premium may be collected by the company with–

(a) Application money
(b) Allotment money
(c) First Call
(d) Second Call

(e) Final Call

(f) Depend upon the terms of issue of shares

34. If purchase consideration given is more than net assets, then the difference is debited to-

(a) Goodwill Account
(b) Capital Reserve Account
(c) Capital Loss Account
(d) Capital Profit Account

35. If purchase consideration given is less than the net assets, then the difference is credited to-