Question 1

To issue shares on Discount mean

Accepted Answer

A)  issue on face value of shares
B)  issue on more than face value of shares
C)  issue on less than face value of shares
D)  initial public offer C

Question 2

To issue shares on premium mean

Accepted Answer

A)  issue on face value of shares
B)  issue on more than face value of shares
C)  issue on less than face value of shares
D)  initial public offer B

Question 3

When shares are forfeited, the share capital account is debited with ________ and the share forfeiture account is credited with __________.

Accepted Answer

A)  paid-up capital of shares forfeited; called up capital of shares forfeited
B)  called up capital of shares forfeited; calls in arrear of shares forfeited
C)  called up capital of shares forfeited; amount received on shares forfeited
D)  none of these C

Question 4

The excess price received over the par value of shares, should be credited __________.

Accepted Answer

A)  calls-in-advance account
B)  share capital account
C)  securities premium account
D)  discount on issue of shares account

Question 5

If the minimum subscription is not received by the company, then the refund of application money should be made within ______ days.

Accepted Answer

A)  7
B)  9
C)  10
D)  22

Question 6

Forfeited shares to become ________

Accepted Answer

A)  property of the government
B)  property of the company
C)  property of the shareholders
D)  property of all the shareholders

Question 7

To issue shares on Par mean

Accepted Answer

A)  issue on face value of shares
B)  issue on more than face value of shares
C)  issue on less than face value of shares
D)  initial public offer

Question 8

As per the SEBI guidelines, on issue of shares, the application money should not be less than

Accepted Answer

A)  2.5% of the nominal value of shares
B)  2.5% of the issue price of shares
C)  25% of the issue price of shares
D)  25% of the nominal value of shares

Question 9

The Securities Premium amount may be utilized by a company for __________.

Accepted Answer

A)  writing off any loss on sale of fixed asset
B)  writing off any loss of revenue nature
C)  writing off the expenses/discount on the issue of debentures
D)  none of these

Question 10

Debentures can be issued only

Accepted Answer

A)  at par
B)  at discount
C)  premium
D)  any of the above

Question 11

Cancelation of shares mean

Accepted Answer

A)  reissue of shares
B)  valuation of shares
C)  forfeiture of shares
D)  allotment of shares

Question 12

Debentures represent the _________

Accepted Answer

A)  manager's share in a business
B)  investment by shareholders in a business
C)  long term borrowing of a business
D)  none of the above

Question 13

Discount on issue of debentures is shown under the heading in a company's Balance Sheet _______

Accepted Answer

A)  fixed assets
B)  loans and advances
C)  investment
D)  miscellaneous expenditure

Exam 10: Issuing and Cancelling Shares and Debentures in a Company