1. The companies are governed by ……………..
(a) The Contract Act, 1872
(b) The Companies Act, 1956
(c) The Partnership Act, 1932
(d) None of the above
2. ……………..is an artificial person created by law,
having separate entity, with perpetual succession
and a common seal.
(a) Partnership firm
(b) HUF
(c) Company
(d) All of above
3. Which of the following can be treated as type of
shares ………………………
(a) Equity shares
(b) Preference share
(c) Both (a) & (b)
(d) None of the above
4. Preference shares are those which carry the
preferential rights as to …………………
(a) The payment of dividend at a fixed rate
(b) The return of capital on winding up of the
company
(c) Both (a) & (b)
(d) None of above
5. …………………… will be entitled to receive arrears of
their dividend.
(a) Cumulative preference share
(b) Non cumulative preference share
(c) Convertible debenture into share
(d) All of the above
6. Generally preference shareholders do not have
any voting right except when dividend is
outstanding for ………………… for cumulative
preference shares and ………………for noncumulative preference shares.
(a) Three years, More than two years
(b) More than two years, three years
(c) More than five years, two years
(d) Three years, More than three years
7. Which of the following right may be given to
preference shareholder if provided by Articles?
(a) To participate in the surplus profits remaining
after payment of equity dividend
(b) To receive arrears of dividend at the time of
winding up
(c) To receive premium on redemption of
preference shares
(d) All of above
8. Which of the following rights may be given to
preference shareholder if provided by Articles?
(a) To participate in the surplus remaining after
the equity shares are redeemed in winding up
(b) To participate in the surplus profits remaining
after payment of equity dividend
(c) To receive arrears of dividend at the time of
winding up
(d) All of above
9. Equity shareholder is ………………….
(a) Entitled to dividend at a fixed rate
(b) Not entitled to dividend at a fixed rate
(c) Entitled to dividend prior to payment of
dividend to preference shareholder
(d) All of above
10. …………………… have the right to vote on any
resolution placed before the company or general
meeting.
(a) Preference shareholder
(b) Equity shareholders
(c) Debenture holder
(d) All of above
11. Amount of capital stated in the Memorandum of
Association as the share capital of the company is
known as ………………..
(a) Called up capital
(b) Subscribed capital
(c) Issued capital
(d) Nominal or authorized capital
12. ……………….refers to that part of the authorized
capital which has actually been offered to the
public for subscription.
(a) Called up capital
(b) Subscribed capital
(c) Issued capital
(d) Nominal or authorized capital
13. ………………………. refers to that part of the issued
capital which has actually been subscribed by the
public
(a) Called up capital
(b) Subscribed capital
(c) Issued capital
(d) Nominal or authorized capital
14. ………………………. refers to that part of the
subscribed capital which has actually been paid by
the shareholder to whom shares has been
allotted.
(a) Paid-up capital
(b) Subscribed capital
(c) Issued capital
(d) Nominal or authorized capital
15. Public companies issue shares to public through
document called ……………………
(a) Letter of offer
(b) Offer for sale
(c) Prospectus
(d) None of above
16. ………………… means the appropriation of a certain
number of shares to an applicant who has applied
shares in public issue by the board of directors in
consultation with stock exchange.
(a) Allotment
(b) Application
(c) First call
(d) Final call
17. The issuer company cannot make allotment of
shares unless ………………….
(a) There is oversubscription
(b) The minimum subscription has been
subscribed
(c) Promoter has subscribed
(d) All of above
18. The minimum subscription is the ……………….of the
issued amount.
(a) 50%
(b) 80%
(c) 75%
(d) 90%
19. When shares are issued at a price equal to the
face value, they are said to be issued at
…………………..
(a) Discount
(b) Premium
(c) Par
(d) None of above
20. When shares are issued at a price higher than the
face value, they are said to be issued at ……………..
(a) Discount
(b) Premium
(c) Par
(d) None of above
21. When shares are issued at a price less than the
face value, they are said to be issued at …………….
(a) Discount
(b) Premium
(c) Par
(d) None of above
22. When shares are not payable in a lump sum, first
instalment is called ………….
(a) Application money
(b) Allotment money
(c) First call money
(d) Final call money
23. When shares are not payable in a lump sum,
second instalment is called ……………….
(a) Application money
(b) Allotment money
(c) First call money
(d) Final call money
24. When shares are not payable in a lump sum, third
instalment is called …………………….
(a) Application money
(b) Allotment money
(c) First call money
(d) Final call money
25. When shares are not payable in a lump sum,
fourth instalment is called …………………
(a) Application money
(b) Allotment money
(c) First call money
(d) Final call money
26. The premium on issue of shares must be treated
as ………………….
(a) Revenue receipt
(b) Deferred revenue receipt
(c) Capital receipt
(d) Capital loss
27. The premium on issue of shares must be credited
to a separate account called ………………
(a) Share premium account
(b) Securities premium account
(c) Discount on issue of shares
(d) None of above
28. Securities premium account must be shown
separately on the liabilities side of the balance
sheet under the heading …………………….
(a) Share capital
(b) Reserves & surplus
(c) Secured loan
(d) Unsecured loan
29. Which of the following company cannot issue
shares at a discount?
(a) New company
(b) Existing company issuing new class of shares
(c) Both (a) & (b)
(d) Banking company
30. The discount on issue of shares must be treated
as ……………………….
(a) Revenue loss
(b) Deferred revenue receipt
(c) Capital receipt
(d) Capital loss
31. The rate of discount on issue of shares cannot
exceed…………….of the nominal value of the
shares.
(a) 10%
(b) 20%
(c) 15%
(d) 5%
32. The discount on issue of shares until it is written
off must be shown on the assets side of the
balance sheet under the head……………..
(a) Current assets
(b) Fixed assets
(c) Miscellaneous Expenditure
(d) Loans & advances
33. Amount due on calls made but not paid is known
as ………………….
(a) Calls-in-Advance
(b) Calls-in-Arrear
(c) Unpaid amounts
(d) Defaulting amounts
34. If the number of shares applied for is less than the
number of shares issued the shares are said to be
…………………..
(a) Oversubscribed
(b) Undersubscribed
(c) Minimum subscription
(d) None of above
35. If the number of shares applied for is more than
the number of shares issued the shares are said to
be ………………………
(a) Oversubscribed
(b) Undersubscribed
(c) Minimum subscription
(d) None of above
36. In case of oversubscription of shares each
applicant receives the shares in some proportion,
it is known as ………………………
(a) Bonus allotment
(b) Right allotment
(c) Per applicant allotment
(d) Pro-rata allotment
37. If authorized by the …………………, a company may
receive from a shareholder the amount remaining
unpaid on shares, even though the amount has
not been called up which is known as calls-inadvance.
(a) Memorandum of association (MOA)
(b) Articles of association (AOA)
(c) Creditors
(d) None of above
38. …………………..paid on calls-in-advance.
(a) Share of company’s profit can be
(b) Dividend can be
(c) No dividend is
(d) None of above
39. As per Table A interest on calls in advance can be
paid at ………………….p.a.
(a) 6%
(b) 8%
(c) 5%
(d) 10%
40. As per Table A interest on calls in arrear can be
received at ………………….p.a.
(a) 6%
(b) 8%
(c) 5%
(d) 10%
41. The interest on calls-in-advance is paid for the
period from the …………………….
(a) Date of receipt of application money to the
date of appropriation
(b) Date of receipt of allotment money to the date
of appropriation
(c) Date of receipt of calls-in-advance to the date
of appropriation of the call
(d) Date of appropriation to the date of dividend
payment
42. Balance of interest on calls-on-arrear account is
transferred to the …………………..at the end of the
year.
(a) Share capital account
(b) Calls in advance account
(c) Securities premium account
(d) Profit & loss account
43. Balance of interest on calls-on-advance account is
transferred to the ……………………at the end of the
year.
(a) Share capital account
(b) Calls in advance account
(c) Securities premium account
(d) Profit & loss account
44. A company may allot fully paid shares to
promoters or any other party for the services
rendered by them, share capital account is
credited and ……………………. Debited.
(a) Preliminary expenses account
(b) Goodwill account
(c) Capital reserve account
(d) Suspense account
45. …………………..may be said to be the compulsory
termination of membership by way of penalty for
non-payment of allotment and/or any call money.
(a) Surrender of shares
(b) Forfeiture of shares
(c) Transfer of shares
(d) Transmission of shares
46. Which of the following security can be forfeited
for non-payment of allotment or call money?
(a) Equity shares
(b) Preference shares
(c) Debentures
(d) Both (a) & (b)
47. Which of the following security cannot be
forfeited for non-payment of allotment or call
money?
(a) Equity shares
(b) Preference shares
(c) Debentures
(d) Both (a) & (b)
48. Shares forfeited account is to be shown in the
balance sheet by way of …………………..to the paid
up share capital on the liabilities side until the
concerned shares are re-issued.
(a) Addition
(b) Deduction
(c) Both (a) & (b)
(d) Neither (a) nor (b)
49. The forfeited shares may be re-issued at
…………………..
(a) Par
(b) Premium
(c) Discount
(d) Any of above
50. On reissue of forfeited shares at discount which
was originally issued at discount, discount up to
original discount debited to ……………………. and
extra discount debited to ……………………….
(a) Share forfeiture account, Discount on issue of
shares
(b) Discount on issue of shares, Securities
premium account
(c) Discount on issue of shares, Share forfeiture
account
(d) Securities premium account, Discount on issue
of shares
51. Balance of share forfeiture account remaining
after reissue is transferred to ………………….
(a) Capital reserve account
(b) Securities premium account
(c) Revenue reserve account
(d) Profit & loss account
52. If forfeited shares are re-issued at a premium, the
amount of such premium should be credited to
……………………..
(a) Capital reserve account
(b) Securities premium account
(c) Revenue reserve account
(d) Profit & loss account
DEBENTURES
53. Debenture holders are the ……………… of the
company.
(a) Creditors
(b) Owners
(c) Qusi owner
(d) Debtors
54. Shareholders are the ……………………….of the
company.
(a) Creditors
(b) Owners
(c) Qusi owner
(d) Debtors
55. Debenture holders ……………….
(a) Have voting rights if interest is not paid for
more than 3 years
(b) Have voting rights if interest is not paid for
more than 2 years
(c) Have no voting rights
(d) Have voting rights
56. Debentures may be issued at ………………………
(a) Par
(b) Premium
(c) Discount
(d) Any of above
57. Debenture interest is paid at a pre-determined
………………. while dividend on equity shares is paid
at a …………………………
(a) Variable rate, Bank rate
(b) Variable rate, Fixed rate
(c) Fixed rate, Variable rate
(d) Fixed rate, Bench mark rate
58. Interest on debentures is the ………………..against
profits.
(a) Appropriation
(b) Charge
(c) Transfer
(d) None of above
59. Dividends are ………………of profits.
(a) Appropriation
(b) Charge
(c) Transfer
(d) None of above
60. In the company’s balance sheet, debentures are
shown under the head …………………
(a) Unsecured Loans
(b) Secured Loans
(c) Current liabilities
(d) Provisions
61. Debentures ………………. Converted into shares as
per the terms of issue of debenture.
(a) Can be
(b) Cannot be
(c) Both (a) & (b)
(d) None of above
62. Debentures ……………………… forfeited for nonpayment of call moneys.
(a) Can be
(b) Cannot be
(c) Both (a) & (b)
(d) None of above
63. At the time of liquidation, debenture holders are
paid-off ……………. the shareholders are paid.
(a) Before
(b) After
(c) At the same time
(d) None of above
64. If the debentures are issued at a price higher than
the nominal value of the debentures, the
premium should be credited to …………………..
(a) General reserve
(b) Securities premium account
(c) Reserve capital
(d) Profit & loss account
65. If the debentures are issued at a price less than
the face value of the debentures, the debentures
are said to be issued at a …………………
(a) Premium
(b) Discount
(c) Par
(d) None of above
66. Discount on issue of shares is …………………..
(a) Revenue loss
(b) Capital profit
(c) Capital loss
(d) Capital receipt
67. Discount on issue of debenture being a capital
loss must be shown specifically on the assets side
of the balance sheet under the heading
………………..
(a) Fixed assets
(b) Current assets
(c) Loans & advances
(d) Miscellaneous expenditure
68. Debentures may be issued by a company for
……………….
(a) Cash
(b) Consideration other than cash
(c) As a collateral security
(d) Any of above
69. The company may allot debentures to the
vendors for acquiring some assets as payment for
purchase consideration, such issue of debentures
to vendors is known as issued of debentures for
………………..
(a) Cash
(b) Consideration other than cash
(c) With consideration
(d) Without consideration
70. If the value of debentures allotted to vendors for
acquiring some assets as payment for purchase
consideration is more than the agreed purchase
price, the difference is credited to …………………..
(a) Capital reserve account
(b) Debenture suspense account
(c) Goodwill account
(d) Profit & loss account
71. If the value of debentures allotted to vendors for
acquiring some assets as payment for purchase
consideration is less than the agreed purchase
price, the difference is debited to ………………….
(a) Capital reserve account
(b) Debenture suspense account
(c) Goodwill account
(d) Profit & loss account
72. When debentures are issued as collateral security
which of the following accounting treatment can
be adopted?
(a) No accounting entry is required to issue
debentures as collateral security.
(b) Pass following entry for issue debentures as
collateral security.
Debentures Suspense A/c
To Debentures A/c
Dr.
(c) (a) or (b)
(d) None of above
REDEMPTION OF PREFERENCE SHARES
73. A company limited by shares may, if authorized
by its …………………. can issue preference shares
which are or at the option of the company are
liable to be redeemed
(a) Memorandum of association
(b) Articles of association
(c) Creditors of company
(d) Debtors of company
74. The preference shares can be redeemed
…………………..
(a) Out of profits
(b) Out of the proceeds of fresh issue of equity
shares
(c) Partly out of profits and partly out of the
proceeds of fresh issue of equity shares
(d) Any of the above
75. When preference shares are redeemed out of
profits such profit must be ………………..
(a) Profits which would otherwise available for
dividend
(b) Capital profit
(c) Revaluation profit
(d) (b) or (c)
76. Only ……………..preferences shares can be
redeemed.
(a) Partly paid up
(b) Fully paid up
(c) (a) & (b)
(d) None of above
77. If any premium is to be payable on redemption of
preference share, such premium has to be
provided …………………..
(a) Out of the profits which would otherwise
available for dividend i.e. free reserve
(b) Out of the securities premium account
(c) (a) or (b)
(d) None of above
78. Where preferences shares are redeemed out of
profits, a sum equal to the nominal amount of the
shares so redeemed must be transferred to
(a) Capital reserve account
(b) Capital redemption reserve account
(c) Capital profit account
(d) Revenue redemption reserve account
79. The capital redemption reserve account may be
applied to issue ………………….
(a) Right shares
(b) Bonus debenture
(c) Bonus to employees of the company
(d) Bonus shares
80. No company limited by shares, issue any
preference shares which is redeemable after the
expiry of a period of …………………. From the date
of issue
(a) Ten years
(b) Five years
(c) Twenty years
(d) Twenty five years
PRACTICAL MCQ
BASICS OF ISSUE OF SHARES
81. N Ltd. issued 1,00,000 equity shares of Rs. 10
each to the public at par. Full amount payable at
the time of application. Application were received
for 1,20,000 shares. Excess application monies
were refunded. Amount to be credited to share
capital account should be …………………….
(a) Rs. 12,00,000
(b) Rs. 10,00,000
(c) Rs. 1,20,000
(d) Rs. 1,00,000
82. S Ltd. issued 1,00,000 equity shares of Rs. 10
each at a premium of Rs. 2 per share to the
public. Full amount payable at the time of
application. Application were received for
1,20,000 shares. Excess application monies were
refunded. Amount to be created to share capital
account should be …………………
(a) Rs. 12,00,000
(b) Rs. 10,00,000
(c) Rs. 14,40,000
(d) Rs. 10,40,000
83. Z Ltd. issued 1,00,000 equity shares of Rs. 10 each
at a discount of Rs. 1 per share to the public. Full
amount payable at the time of application.
Application were received for 1,20,000 shares.
Excess application monies were refunded.
Amount to be credited to share capital account
should be ………………..
(a) Rs.9,00,000
(b) Rs. 10,00,000
(c) Rs. 14,40,000
(d) Rs. 10,80,000
84. The subscribed share capital of S Ltd. is Rs.
80,00,000 of Rs. 100 each. There were no calls in
arrear till the final call was made. The final call
made was paid on 77,500 shares. The calls in
arrear amounted to Rs. 62,500. The final call per
share = ?
(a) Rs. 25
(b) Rs. 7.80
(c) Rs. 20
(d) Rs. 62.50
On the basis of the information given below,
answer next 9 questions.
B Ltd. issued 1,00,000 equity shares of Rs. 10
each to the public at par. The details of the
amount payable are as follows:
Application
Allotment
First & final call
Rs. Per share
2.00
3.00
5.00
Application were received for 1,20,000 shares.
Excess application monies were refunded. All other
amount was received excepting final call on 1,000
shares. These shares were forfeited and reissued of
Rs. 8 per share.
85. On receipt of application money Bank Account
will be debited by Rs. ………………………
(a) Rs. 2,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
86. Amount to be refunded on allotment for excess
application – Rs. ……………………
(a) Rs. 20,000
(b) Rs. 40,000
(c) Rs. 30,000
(d) Rs. 50,000
87. Amount due on allotment = Rs. ………………..
(a) Rs. 2,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
88. Amount due on first & final call = Rs. ………………
(a) Rs. 2,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
89. On receipt of first & final call bank account will be
debited by = Rs. ………………..
(a) Rs. 2,00,000
(b) Rs. 4,95,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
90. On forfeiture of shares “Share Forfeiture
Account” will be credited by Rs. …………………..
(a) Rs. 3,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 2,000
91. On reissue of forfeited shares discount debited to
“Share Forfeiture Account” = Rs. …………
(a) Rs. 3,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 2,000
92. On reissue of forfeited shares balance of “Share
Forfeiture Account” transferred to capital reserve
account = Rs. ………………….
(a) Rs. 3,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 2,000
93. Closing balance of Bank Account = Rs. …………..
(a) Rs. 10,03,000
(b) Rs. 10,00,000
(c) Rs. 10,43,000
(d) Rs. 12,00,000
On the basis of the information given below,
answer next 9 questions.
D Ltd. issued 1,00,000 equity shares of Rs. 10 each at
a premium of Rs. 2 per share. The amount payable
as:
Rs. 2 on application,
Rs. 5 on allotment (including premium) &
Rest on first & final call.
Applications were received for 1,20,000 shares.
Excess application money were refunded to
applicants. All monies due were received except the
allotment and first & final call monies on 1,000
shares. These shares were forfeited and reissued at
Rs. 9 per share.
94. On receipt of application money Bank Account
will be debited by Rs. …………………
(a) Rs. 2,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
95. Amount to be refunded on allotment for excess
application – Rs. …………………..
(a) Rs. 20,000
(b) Rs. 40,000
(c) Rs. 30,000
(d) Rs. 50,000
96. Amount due on allotment = Rs. …………..
(a) Rs. 2,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
97. Amount due on first & final call = Rs. …………..
(a) Rs. 2,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
98. On receipt of first & final call bank account will be
debited by = Rs. …………………..
(a) Rs. 2,00,000
(b) Rs. 4,95,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
99. On forfeiture of shares “Share Forfeiture
Account” will be credited by Rs. ………………….
(a) Rs. 3,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 2,000
100. On reissue of forfeited shares discount debited
to “Share Forfeiture Account” = Rs. ………………
(a) Rs. 1,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 2,000
101. On reissue of forfeited shares balance of “Share
forfeiture Account” transferred to capital
reserve account = Rs. ………………..
(a) Rs. 3,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 1,000
102. Closing balance of Bank Account = Rs. ……………
(a) Rs. 12,39,000
(b) Rs. 12,00,000
(c) Rs. 10,43,000
(d) Rs. 11,99,000
On the basis of the information given below,
answer next 9 questions.
N Ltd. issued 1,00,000 shares of Rs. 10 each at a
discount of 10%, payable as:
Application
Rs. 2
Allotment
4
Final call
3
All shares offered were subscribed for & money
was duly received. All monies due were received
except the first & final call monies on 1,000
shares. These shares were forfeited and reissued
at Rs. 7 per share.
103. On receipt of application money Bank Account
will be debited by Rs. ……………
(a) Rs. 2,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
104. Amount due on allotment = Rs. ……………
(a) Rs. 4,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
105. Amount due on first & final call = Rs. ………………
(a) Rs. 2,00,000
(b) Rs. 2,40,000
(c) Rs. 3,00,000
(d) Rs. 5,00,000
106. On receipt of first & final call bank account will
be debited by = Rs. ……………….
(a) Rs. 2,97,000
(b) Rs. 4,95,000
(c) Rs. 3,97,000
(d) Rs. 5,00,000
107. On forfeiture of shares “Share Forfeiture
Account” will be credited by Rs. ………………..
(a) Rs. 3,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 6,000
108. On reissue of forfeited shares discount debited
to “Share Forfeiture Account” = Rs. ………………
(a) Rs. 6,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 2,000
109. On reissue of forfeited shares balance of “Share
Forfeiture Account” transferred to capital
reserve account = Rs. …………….
(a) Rs. 3,000
(b) Rs. 5,000
(c) Rs. 8,000
(d) Rs. 4,000
110. Closing balance of Bank Account = Rs. …………..
(a) Rs. 8,64,000
(b) Rs. 9,04,000
(c) Rs. 10,43,000
(d) Rs. 11,99,000
INTEREST ON CALL-IN-ARREAR & CALL-IN-ADVANCE
111. On 1.1.2009, X Ltd. marks an issue of 1,00,000
equity shares of Rs. 10 each payable as follows:
Application
Rs. 20
Allotment
30
Final call
50
( 3 months after allotment)
Applications were received for 1,20,000 shares
and the directors refunded the excess
application money. One shareholder, who was
allotted 2,000, shares paid first and final call
with allotment money and another shareholder
did not pay allotment money on his 3,000
shares but which he paid with first and final call.
Directors have decided to charge and allows
interest, according to the provisions of Table-A.
The amount of interest on calls-in-arrear = ?
(a) Rs. 1,125
(b) Rs. 1,350
(c) Rs. 2,125
(d) Rs. 2,500
112. On 1.1.2009, X Ltd. marks an issue of 1,00,000
equity shares of Rs. 10 each payable as follows:
Application
Rs. 20
Allotment
30
Final call
50
(3 months after allotment)
Applications were received for 1,20,000 shares
and the directors refunded the excess
application money. One shareholder, who was
allotted 2,000, shares paid first and final call
with allotment money and another shareholder
did not pay allotment money on his 3,000
shares but which he paid with first and final call.
Directors have decided to charge and allows
interest, according to the provisions of Table-A.
The amount of interest on calls-in-advance = ?
(a) Rs. 1,250
(b) Rs. 1,500
(c) Rs. 2,125
(d) Rs. 2,500
113. Z Ltd. made the first call of Rs. 30 per share on
15.1.2012. The last date of payment of call
money was 31.1.2012. Mr. N. holding 50,000
shares paid the call money on 15.3.2012. The
company had adopted Table A, the amount of
interest on calls-in-arrear = ?
(a) Rs. 6,250
(b) Rs. 9,375
(c) Rs. 11,250
(d) Rs. 7,500
114. W Ltd. issued 2,00,000 shares of Rs. 100 each at
a premium of 20% on May 1, 2009, payable as
follows:
On application (inclusive of premium) Rs.45
On allotment
Rs. 25
On first & final call
Rs. 50
Sunil to whom 10,000 shares were allotted, has
paid Rs. 5,00,000 on June 1,2009. At the time of
remitting the allotment money, he indicated
that the excess money should be adjusted
towards the call money. The directors of the
company made the first and final call on
October 31, 2009. The company has a policy of
paying interest on calls-in-advance as per Table
A. The amount of interest paid to Sunil and callsin-advance = ?
(a) Rs. 12,500
(b) Rs. 5,208.33
(c) Rs. 10,416.67
(d) Rs. 6,250
ISSUE OF SHARES FOR CONSIDERATION OTHER
THAN CASH
115. N Ltd. purchased machinery costing Rs. 10,000
and issued share of Rs. 10 to vendor. The
number of shares to be issued to vendor = ?
(a) 10,000
(b) 1,000
(c) 9,000
(d)5,000
116. S Ltd. purchased building costing Rs. 1,20,000
and issued shares of Rs. 10 each at Rs. 12 to
vendor. The number of shares to be issued to
vendor = ?
(a) 10,000
(b) 1,000
(c) 9,000
(d)5,000
117. Z Ltd. purchased furniture costing Rs. 90,000
and issued shares having price value of Rs.
1,00,000 shares of Rs. 10 issued of Rs. 9. No. of
shares to be issued = ?
(a) 10,000
(b) 1,000
(c) 9,000
(d) 5,000
118. N Ltd. issued 5,000 shares @ Rs. 10 to
promoters for their service relating to
incorporation. Appropriate journal entry to
record this ………………..
Share Capital A/c
Dr.
To Goodwill A/c
Goodwill A/c
Dr.
To Share Capital A/c
Goodwill A/c
Dr.
To Preliminary Expenses A/c
Preliminary Expenses A/c Dr.
To Share Capital A/c
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
119. R Ltd. purchased the business of C Ltd. for
Rs.2,70,000 payable in fully paid shares. R Ltd.
allotted equity shares of Rs. 10 each fully paid in
satisfaction of the claim by C Ltd. Such shares
are issued at par. The number of shares to be
issued by R Ltd. to settle the purchase
consideration = ?
(a) 22,500
(b) 27,500
(c) 27,000
(d) 30,000
120. R Ltd purchased the business of C Ltd. for Rs.
2,70,000 payable in fully paid shares. R Ltd.
allotted equity shares of Rs. 10 each fully paid in
satisfaction of the claim by C Ltd. Such shares
are issued at premium of 20%. The number of
shares to be issued by R Ltd. to settle the
purchase consideration = ?
(a) 22,500
(b) 27,500
(c) 27,000
(d) 30,000
121. R Ld. Purchased the business of C Ltd. for Rs.
2,70,000 payable in fully paid shares. R Ltd.
allotted equity shares of Rs. 10 each fully paid in
satisfaction of the claim by C Ltd. Such shares
are issued at a discount 10%. The number of
shares to be issued by R Ltd. to settle the
purchase consideration = ?
(a) 22,500
(b) 27,500
(c) 27,000
(d) 30,000
122. S. Ltd. acquired fixed assets worth Rs. 15,00,000
by issue of shares of Rs. 100 at a premium of
25%. The number of shares to be issued by S Ltd.
to settle the purchase consideration = ?
(a) 12,000 shares
(b) 15,000 shares
(c) 18,750 shares
(d) 11,250 shares
PRO RATA ALLOTMENT
123. Q Ltd. had allotted 1,00,000 shares to the
applicants of 1,40,000 shares on pro rata basis.
The amount payable on application is Rs. 2. Mr.
N applied for 4,200 shares. The number of
shares allotted and the amount carried forward
for adjustment against allotment money due
from Mr. N = ?
(a) 600 shares; Rs. 1,200
(b) 3,200 shares; Rs. 2,000
(c) 3,400 shares; Rs. 1,600
(d) 3,000 shares; Rs. 2,400
FORFEITURE & REISSUE OF SHARES
124. R Ltd. forfeited 300 equity shares of Rs. 10 fully
called-up, held by Mr. X for non-payment of first
call of Rs.2 and final of Rs. 3 each. However, he
paid application money @ Rs. 2 per share and
allotment money @ Rs. 3 per share. At the time
of forfeiture for share capital account will be
credited by Rs. ………………
(a) 1,500
(b) 3,000
(c) 600
(d) 900
125. R Ltd. forfeited 300 equity shares of Rs. 10 fully
called-up, held by Mr. X for non-payment of first
call of Rs. 2 and final of Rs. 3 each. However, he
paid application money @ Rs. 2 per share and
allotment money @ Rs. 3 per share. These
shares were reissued at Rs. 10 each. On reissue
amount to be transferred to capital reserve
account = ?
(a) 1,500
(b) 3,000
(c) 600
(d) 900
126. R. Ltd. forfeited 300 equity shares of Rs. 10 fully
called-up, held by Mr. X for non-payment of first
call of Rs. 2 and final of Rs. 3 each. However, he
paid application money @ Rs. 2 per share and
allotment money @ Rs. 3 per share. These
shares were reissued at Rs. 7 each. On reissue
amount to be transferred to capital reserve
account = ?
(a) 1,500
(b) 3,000
(c) 600
(d) 900
127. R Ld. Forfeited 300 equity shares of Rs. 10 fully
called-up, held by Mr. X for non-payment of first
call of Rs. 2 and final of Rs 3 each. However, he
paid application money @ Rs. 2 per share and
allotment money @ Rs. 3 per share. These
shares were reissued at Rs. 12 each. On reissue
amount to be transferred to capital reserve
account = ?
(a) 1,500
(b) 3,000
(c) 600
(d) 900
128. T Ltd. forfeited 500 equity shares of Rs. 10 fully
called-up, held by Mr. Ram for non-payment of
allotment money of Rs.5 (including Rs. 2
premium), first call of Rs.2 and final of Rs. 3
each. However, he paid application money @ Rs.
2 per share. These shares were reissued at Rs.
10 each. On reissue amount to be transferred to
capital reserve account = ?
(a) Rs. 1,500
(b) Rs. 2,500
(c) Rs. 500
(d) Rs. 1,000
129. T Ltd. forfeited 500 equity shares of Rs. 10 fully
called-up, held by Mr. Ram for non-payment of
allotment money of Rs. 5 (including Rs. 2
premium), first call of Rs. 2 and final of Rs. 3
each. However, he paid application money @ Rs.
2 per share. These shares were reissued at Rs. 9
each. On reissue amount to be transferred to
capital reserve account = ?
(a) Rs. 1,500
(b) Rs. 2,500
(c) Rs. 500
(d) Rs. 1,000
130. T Ltd. Forfeited 500 equity shares of Rs. 10 fully
called-up, held by Mr. Ram for non-payment of
allotment money of Rs. 5 (including Rs. 2
premium), first call of Rs. 2 and final of Rs. 3
each. However, he paid application money @ Rs.
2 per share. These shares were reissued at Rs.
13 each. On reissue amount to be transferred to
capital reserve account = ?
(a) Rs. 1,500
(b) Rs. 2,500
(c) Rs. 500
(d) Rs. 1,000
131. W Ltd. forfeited 400 equity shares of Rs. 10 fully
called-up, held by Mr. P for non-payment of final
of Rs. 3 each. However, he paid application
money @ Rs.2, Allotment Rs. 2 and first call Rs. 2
per share. These shares were reissued at Rs. 10
each. On reissue amount to be transferred to
capital reserve account = ?
(a) Rs. 2,400
(b) Rs. 1,600
(c) Rs. 1,200
(d) Rs. 400
132. W Ltd. forfeited 400 equity shares of Rs. 10 fully
called-up, held by Mr. P for non-payment of final
of Rs. 3 each. However, he paid application
money @ Rs. 2, Allotment Rs. 2 and first call Rs.
2 per share. These shares were reissued at Rs. 7
each. On reissue amount to be transferred to
capital reserve account = ?
(a) Rs. 2,400
(b) Rs. 1,600
(c) Rs. 1,200
(d) Rs. 400
133. W Ltd. forfeited 400 equity shares of Rs. 10 fully
called-up, held by Mr. P for non-payment of final
of Rs. 3 each. However, he paid application
money @ Rs. 2 Allotment Rs. 2 and first call Rs. 2
per share. These shares were reissued at Rs. 13
each. On reissue amount to be transferred to
capital reserve account = ?
(a) Rs. 2,400
(b) Rs. 1,600
(c) Rs. 1,200
(d) Rs. 400
134. X Ltd. forfeited 200 equity shares of Rs. 10 each,
Rs. 8 called-up for non-payment of first call
money @ Rs. 2 each. Application money @ Rs. 2
per share and allotment money @ Rs. 4 per
share have already been received by the
company. Out of these 150 share were reissued
at 7 per share as showing Rs. 8 paid up. On
reissue amount to be transferred to capital
reserve account = ?
(a) Rs. 1,200
(b) Rs. 1,600
(c) Rs. 1,050
(d) Rs. 750
135. Jindal Ltd. forfeited 400 equity shares of Rs. 10
each, issued at a discount of 10%, held by Mr. X
for non-payment of the first call of Rs. 2 per
share and the final call of Rs. 3 per share. Out of
these 250 equity shares were re-issued to Mr. Y
Rs. 8 per share and the rest of these were reissued to Mr. Z at Rs. 7 per share. On reissue
amount to be transferred to capital reserve
account = ?
(a) Rs. 1,200
(b) Rs. 1,600
(c) Rs. 1,050
(d) Rs. 750
136. A company has subscribed capital of 2,00,000
equity shares of Rs.25 each, Rs.20 per share
called up. The directors forfeited 200 equity held
by a shareholder who failed to pay the first call
made @ Rs. 10 per share. Later, the directors
reissued these shares as Rs. 20 per share paid up
at Rs. 15 per share. On reissue amount to be
transferred to capital reserve account = ?
(a) Rs. 1,000
(b) Rs. 1,400
(c) Rs. 1,500
(d) Rs. 1,100
137. Due to non-payment of fist call of Rs.3 per share,
Mona Ltd. forfeited 100 shares of Rs. 10 each,
which were issued at a discount of Rs. 1 per
share, Rs. 8 per share were called-up till date. Of
these, forfeited shares 80 shares were issued
subsequently by Mona Ltd., at Rs. 5 as Rs. 8
paid-up per share. On reissue amount to be
transferred to capital reserve account = ?
(a) Rs. 100
(b) Rs. 140
(c) Rs. 150
(d) Rs. 160
138. Sukriti Ltd. forfeited 100 shares of Rs. 10 each
for non-payment of final call of Rs. 2. Of these,
60 shares were re-issued @ Rs. 9 per share as
fully paid. On reissue amount to be transferred
to capital reserve account = ?
(a) Rs. 420
(b) Rs. 800
(c) Rs. 200
(d) Rs. 540
139. Z Ltd. issued 10,000 shares of Rs. 10 each. The
called up value per share was Rs.8. The company
forfeited 200 shares of Mr. A for non-payment
of 1st call money of Rs. 2 per share. He paid Rs. 6
for application and allotment money. On
forfeiture, the share capital account will be -----------------(a) Debited by Rs. 2,000
(b) Debited by Rs. 1,600
(c) Credited by Rs. 1,600
(d) Debited by Rs. 1,200
140. Alex Ltd. forfeited 100 shares of Rs. 10 each
issued at a premium of 20% (to be paid at the
time of application money) on which allotment
money of Rs.4 and first call money of Rs. 3 were
not received; the final call money of Rs. 2 is not
yet called. These shares were originally allotted
in the ratio of 4:5. These shares were
subsequently re-issued at a discount of Rs. 1 per
share, credited as Rs. 8 paid-up. On reissue
amount to be transferred to capital reserve
account = ?
(a) Rs. 90
(b) Rs. 81
(c) Rs. 75
(d) Rs. 54
ISSUE OF DEBENTURES
141. ZPA Ltd. issued 10,000, 2% Debentures of
Rs.100 each at per payable in full on application
by 1st April, 2010. Applications were received for
11,000 Debenture. Debentures were allotted on
7th April, 2010. Excess money was refunded.
Amount that will appear in balance sheet as
“12% Debenture” = ?
(a) Rs.1 1,00,000
(b) Rs.10,00,000
(c) Rs. 9,00,000
(d) Rs. 10,80,000
142. Z Ltd. issued 10,000, 2% Debentures of Rs. 100
each at a discount of 10% payable in full on
application by 31st May 2010. Applications were
received for 12,000 debenture. Debentures
were allotted on 9th June 2010. Excess monies
were refunded on the same date. Amount that
will appear in balance sheet as “12% Debenture”
=?
(a) Rs. 11,00,000
(b) Rs. 10,00,000
(c) Rs. 9,00,000
(d) Rs. 10,80,000
143. ZPA Ltd. issued 10,000, 12% Debentures of Rs.
100 each at Rs. 94 on 1st January, 2010. Under
the terms of issue, the debentures are
redeemable at the end of 8 years from the date
of the issue. Calculate the amount of discount to
be written-off in each of the 8 years.
(a) Rs. 8,000
(b) Rs. 7,500
(c) Rs. 6,000
(d) Rs. 5,000
144. HDC Ltd. issued 10,000, 12% Debentures of Rs.
100 each at Rs. 94 on 1st January 2010. Under
the term of issue, 1/5th of the debentures are
annually redeemable by drawings, the first
redemption occurring on 31st December 2010.
Calculate the amount of discount to be written
off in 2010 & 2011.
(a) Rs.20,000 & 16,000
(b) Rs. 16,000 & 12,000
(c) Rs. 16,000 & 12,000
(d) Rs. 12,000 & 8,000
145. Z Ltd. issued 10% Debentures of Rs. 100 to a
vendor having face value Rs. 2,50,000 for
purchase of fixed assets of Rs. 2,00,000. No. of
debentures to issued to vendors = ?
(a) 25,000
(b) 20,000
(c) 10,000
(d) 30,000
146. X Ltd. obtained loan from IDBI of Rs. 10,00,000,
giving as collateral security of Rs. 15,00,000, 14%
Debenture on 1st April 2011. Which of the
following accounting treatment is correct to
issue debenture as collateral security ?
(a) No accounting entry is required
(b) Debenture Suspense A/c Dr.
15,00,000
To 14% Debenture A/c
15,00,000
(c) Either (a) or (b)
(d) None of above
REDEMPTION OF PREFERENCE SHARES
147. N Ltd. had 9,000 8% preference shares of Rs.
100 each, fully paid up. The company decided to
redeem these preference shares at par by the
issue of sufficient number of equity shares. How
much equity shares are required to be issued if
new equity shares are to be issued at Rs. 10
each.
(a) 90,000
(b) 1,00,000
(c) 75,000
(d) 93,333
148. S Ltd. had 9,000 8% preference shares of Rs. 100
each, fully paid up. The company decided to
redeem these preference shares at par by the
issue of sufficient number of equity shares. How
much equity shares are required to be issued if
new equity shares are to be issued at Rs. 12 for a
premium including Rs. 2
(a) 90,000
(b) 1,00,000
(c) 75,000
(d) 93,333
149. S Ltd. had 9,000 8% preference shares of Rs. 100
each, fully paid up. The company decided to
redeem these preference share at par by the
issue of sufficient number of equity shares. How
much equity shares are required to be issued if
new equity shares are to be issued at Rs. 9.
(a) 90,000
(b) 1,00,000
(c) 75,000
(d) 93,333
150. S Ltd. issue 2,000, 10% preference shares of Rs.
100 each at par, which are redeemable at a
premium of 10%. For the purpose of
redemption, the company issued 1,500 Equity
Shares of Rs. 100 each at a premium of 20% per
share. At the time of redemption of Preference
Shares, the amount to be transferred by the
company to the Capital Redemption Reserve
Account = ?
(a) Rs.50,000
(b) Rs. 40,000
(c) Rs. 2,00,000
(d) Rs. 2,20,000
151. During the year 2005-2006, T Ltd. issued 20,000,
12% Preference Shares of Rs. 10 each at a
premium of 5%, which are redeemable after 4
years at par. During the year 2010-2011, as the
company did not have sufficient cash resources
to redeem the preference shares, it issued
10,000, 14% debentures of Rs.10 each at a
premium of 10%. At the time of redemption of
12% preference shares, the amount to be
transferred to capital redemption reserve = ?
(a) Rs. 90,000
(b) Rs. 1,00,000
(c) Rs. 2,00,000
(d) Rs. 1,10,000
152. Preference shares amounting to Rs.2,00,000 are
redeemed at a premium of 5%, by issue of
shares amounting to Rs. 1,00,000 at a premium
of 10%. The amount to be transferred to capital
redemption reserve = ?
(a) Rs. 1,05,000
(b) Rs. 1,00,000
(c) Rs. 2,00,000
(d) Rs. 1,11,000
153. The balance sheet of A Ltd. as on 31st December
2008 has 20,000 9% preference shares of Rs. 10
each. On 1.1.2009 the company redeemed
preference shares at a premium of Rs. 2 per
share. For redemption it realized investments at
a value of Rs. 1,60,000 (Book value Rs. 2,00,000).
At the time of redemption balance in profit &
loss account was Rs. 1,60,000.
Issued at a premium of Rs. 40 per share, such a
number of equity shares of Rs. 100 each for the
purpose of redemption as to ensure that after
the compliance with the requirements of the
Companies Act, 1956, the credit balance in profit
and loss account would be Rs. 25,000. No of
equity shares to be issued are …………….. &
balance transferred to capital redemption
account Rs. ……………..
(a) 1,200 shares & Rs. 80,000
(b) 800 Shares & Rs. 1,20,000
(c) 1,450 shares & Rs. 55,000
(d) 1,050 shares & Rs. 95,000
154. No of shares that can be redeemed …………..
(a) 1,000
(b) 900
(c) 800
(d) 850
155. Premium payable on redemption of preference
share ………………..
(a) Rs. 18,000
(b) Rs. 20,000
(c) Rs. 15,000
(d) Rs. 25,000
156. No of equity shares to be issued to finance
redemption should be …………..
(a) 9,600
(b) 8,600
(c) 7,600
(d) 7,500
157. Loss on sale of fixed assets = ?
(a) 2,000
(b) 3,000
(c) 18,000
(d) 20,000
158. Amount paid on redemption of preference
shares Rs. …………………..
(a) 1,08,000
(b) 1,02,000
(c) 1,00,000
(d) 90,000
159. Amount transferred to CRR = ?
(a) 12,000
(b) 19,600
(c) 21,600
(d) 25,000
160 Closing balance of Bank Account will be Rs.
……………
(a) 25,000
(b) 50,000
(c) 75,000
(d) 30,000
161. After redemption balance sheet will tally at Rs.
…………………
(a) 3,42,600
(b) 2,42,600
(c) 2,48,600
(d) 2,00,000
Question No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
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15.
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40.
Answers
(b)
(c)
(c)
(c)
(a)
(b)
(d)
(d)
(b)
(b)
(d)
(c)
(b)
(a)
(c)
(a)
(b)
(d)
(c)
(b)
(a)
(a)
(b)
(c)
(d)
(c)
(b)
(b)
(c)
(d)
(a)
(c)
(b)
(b)
(a)
(d)
(b)
(c)
(c)
(a)
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
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60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
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89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
(c)
(d)
(d)
(b)
(b)
(d)
(c)
(a)
(d)
(c)
(a)
(b)
(a)
(b)
(c)
(d)
(c)
(b)
(a)
(b)
(a)
(b)
(a)
(b)
(b)
(c)
(d)
(d)
(b)
(c)
(a)
(c)
(b)
(d)
(a)
(b)
(c)
(b)
(d)
(c)
(b)
(b)
(b)
(a)
(b)
(b)
(c)
(d)
(b)
(b)
(d)
(a)
(a)
(b)
(b)
(d)
(d)
(b)
(d)
(a)
(d)
(d)
(a)
(a)
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.
116.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
139.
140.
141.
142.
143.
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
(c)
(a)
(d)
(d)
(d)
(a)
(a)
(b)
(b)
(d)
(b)
(a)
(a)
(b)
(c)
(a)
(d)
(a)
(d)
(a)
(a)
(c)
(a)
(d)
(c)
(d)
(a)
(b)
(a)
(d)
(c)
(a)
(d)
(a)
(b)
(d)
(b)
(b)
(a)
(a)
(a)
(c)
(a)
(a)
(b)
(a)
(c)
(b)
(c)
(b)
(a)
(c)
(a)
(b)
(c)
(a)
(b)