Deck 15: Formation and Capital Structure of Public Companies

Question 1

. ……….is the first stage in the formation of a public company

A)Promotion
B)Incorporation
C)Capital Subscription
D)Commencement

Answer 1

Promotion

Question 2

Authorised capital is called as……………

A)Reserve capital
B)Nominal Capital
C)Capital Reserve
D)Subscribed capital

Answer 2

Nominal Capital

Question 3

. …………..is that portion of capital which is called up only on winding up of the company.

A)Authorised Capital
B)Issued capital
C)Subscribed capital
D)Reserve capital

Answer 3

Reserve capital

Question 4

In case of ……………..preference shares, the arrears of dividend are carried forward and paid out of the profits of the subsequent years.

A)Participating
B)Convertible
C)Cumulative
D)Redeemable

Question 5

. …………..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

Question 6

A bundle of fully paid shares is called……………..

A)Stock
B)Sweat Equity
C)Warrant
D)None of these

Question 7

IPO stands for ………………

A)Initial Private Offer
B)International Public Offer
C)Initial Public Offer
D)International Private Offer

Question 8

In …... the company offers the investors an opportunity to bid collectively.

A)Private Placement
B)Offer for sale
C)Book building
D)IPO

Question 9

As per the companies Act, the interest on calls in advance is …………..

A)10%
B)6%
C)5%
D)7%

Question 10

The rate of interest on Calls in arrears as per Companies Act is …………

A)10%
B)6%
C)5%
D)7%

Question 11

The shares of a company can be issued at …………..

A)Par
B)Premium
C)Discount
D)All of these

Question 12

Share application account is a ………..

A)Real Account
B)Nominal Account
C)Impersonal Account.
D)Personal Account

Question 13

The rate of discount on shares cannot exceed ……….

A)10%
B)5%
C)6%
D)7%

Question 14

A newly established company cannot issue shares at ……

A)Par
B)Premium
C)Discount
D)All of these

Question 15

. ………..of total issued amount of capital is called minimum subscription.

A)75%
B)90%
C)95%
D)80%

Question 16

The rate of discount should not exceed ……………. Of nominal vale of shares.

A)10%
B)5%
C)6%
D)7%

Question 17

The minimum application money to be paid by an applicant must not be less than …… as per Companies Act.

A)10%
B)5%
C)15%
D)20%

Question 18

The excess price received on the par value of shares should be credited to ………….

A)Calls in advance A/c
B)Reserve Capital A/c
C)Security Premium A/c
D)None of these

Question 19

The profit on reissue of forfeited shares is transferred to ………

A)General reserve
B)Capital Redemption reserve
C)Capital reserve
D)Investment Allowance reserve

Question 20

Preference shareholders are…………

A)Debtors of the company
B)Creditors of the company
C)Owners of the company
D)None of these

Question 21

The shares firstly offered to the existing shareholders are called as ………….

A)Right shares
B)Bonus shares
C)Ordinary shares
D)None of these

Question 22

The security premium account is shown in the balance sheet under the head……….

A)Share capital
B)Reserves & Surplus
C)Secured loans
D)Current liabilities

Question 23

………..should be deducted from the share capital to determine the paid up capital.

A)Security premium
B)Calls in advance
C)Calls in arrears
D)Discount on issue

Question 24

The share capital account is debited with …………while forfeiting shares

A)Calls in arrears
B)Paid up capital
C)Called capital
D)Issued capital

Question 25

On an equity share of Rs. 20, the company has called up Rs. 16 but Rs.14 has been received by the company, the share capital account should be credited by ……

A)Rs. 20
B)Rs. 16
C)Rs. 14
D)Rs. 6