Questions for Chapter-Accounting Share Capital 

MCQ-Based Questions for CUET Accountancy chapter-Accounting Share Capital 

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Practice Questions for CUET Accountancy chapter-Accounting Share Capital SET-1

Accounts - MCQ on Accounting Share Capital

Class XII

Q.1 A Company is established by Registration Under:

(a) Public Companies Act’1956

(b) Registered Companies Act’1956

(c) Indian Companies Act’1956

(d) The Companies Act’1956

Answer:

(d)

Q.2 Security Premium Account is recorded in:

(a) Balance Sheet under “Current Assets, Loans and Advances” Head

(b) Balance Sheet under “ Reserve and Surplus” Head

(c) Profit and Loss Account on Income Side

(d) Balance Sheet under “Issued and Paid-up Share Capital” Head

Answer:

(b)

Q.3 “Discount on issue of Shares Account” is shown under:

(a) Balance Sheet under “Current Assets, Loans and Advances” Head

(b) Balance Sheet under “ Reserve and Surplus” Head

(c) Balance Sheet under “Misc. Expenditure _ to the extent not written-off” Head

(d) Profit and Loss Account on Expenditure side

Answer:

( c )

Q.4 In case Articles of Association of a Company are silent about the interest rate on calls in advance or calls in arrears, the following shall apply:

(a) Table – A

(b) Schedule – A

(c) Appendix – A

(d) Para – A

Answer:

No.4 ( a )

Q.5 What is the rate of Interest on calls in Arrears to be charged, in case the Articles of Association of the Company are silent

(a) No Interest

(b) 5 %

(c) 6 %

(d) 10 %

Answer:

( b )

Q.6 What is the rate of Interest on calls in Advance to be paid, in case the Articles of Association of the Company are silent

(a) No Interest

(b) 5 %

(c) 6 %

(d) 10 %

Answer:

No.6 ( c )

Q.7 A call in Arrears Account is shown in the Balance Sheet under the Head:

(a) Issue and paid –up Capital

(b) Reserve and Surplus

(c) Current Assets and Loans and Advances

(d) Current Liabilities and Provisions

Answer:

( a )

Q.8 A call in Advance Account is shown in the Balance Sheet under the Head:

(a) Issue and paid –up Capital

(b) Reserve and Surplus

(c) Current Assets and Loans and Advances

(d) Current Liabilities and Provisions

Answer:

( d )

Q.9 Share Forfeited Account is shown in the Balance Sheet under the Head:

(a) Issue and paid –up Capital

(b) Reserve and Surplus

(c) Current Assets and Loans and Advances

(d) Current Liabilities and Provisions

Answer:

( b )

Q.10 Issue of Shares to Promoters is debited to:

(a) “Issue of shares Account”

(b) “Incorporation Expenses Account”

(c) “Promoters Account”

(d) “Equity share Capital Account”

Answer:

( b )

Q.11 The portion of Authorized Capital, which can be issued only at the time of Liquidation of the Company

(a) Un - issued Share Capital

(b) Capital Reserve

(c) Reserve Capital

(d) Liquid Capital

Answer:

( c )

Q.12 Security Premium Account cannot be utilized for which of the following purpose:

(a) For Redemption of Preference Share Capital

(b) For Issue of Bonus shares

(c) For writing of Discount on issue of shares

(d) For writing of Preliminary expenses

Answer:

( a )

Q.13 What is true in case of Preference Shares

(a) They do not carry any fixed rate of Dividend

(b) They can not be converted into other form of liability

(c) They have right to be repaid at the time of liquidation ahead of Equity Shareholders.

(d) They are shown under Reserve and Surplus Head of Balance Sheet.

Answer:

( c )

Q.14 What is true in case of Equity Shares

(a) They carry any fixed rate of Dividend

(b) They can be converted into other form of liability

(c) They have right to be repaid at the time of liquidation ahead of Preference Shareholders.

(d) They are owners of the Company.

Answer:

( d )

Q.15 What is the amount of Minimum Paid up capital in case of a Private Company

(a) Rs.1,00,000

(b) Rs.5,00,000

(c) Rs.10,00,000

(d) Rs.50,00,000

Answer:

( a )

Q.16 What is the amount of Minimum Paid up capital in case of a Public Company

(a) Rs.1,00,000

(b) Rs.5,00,000

(c) Rs.10,00,000

(d) Rs.50,00,000

Answer:

( b )

Q.17 Which Section of the Company Act’1956 provide for Buy Back of shares by the Company

(a) Section 87 (B)

(b) Section 77 (D)

(c) Section 77 (A)

(d) Section 87 (A)

Answer:

( c )

Q.18 On Forfeiture of shares, the ‘Share Capital Account’ is debited with the amount of:

(a) The amount received on such shares.

(b) The amount not received on calls made on such shares.

(c) The par value of shares.

(d) The total amount called up on such shares at the time of forfeiture.

Answer:

( d )

Q.19 At the time of forfeiture, the ‘Security Premium Account’ is debited in the following circumstance:

(a) In case the Shares were issued at Premium and Premium was not received

(b) In case the shares were issued at Premium and Premium was received

(c) In case the forfeited shares are to be reissued at Premium

(d) In case the forfeited shares are to be reissued at Discount

Answer:

( a )

Q.20 At the time of forfeiture, the ‘Discount on Issue of Shares Account’ is:

(a) Not credited.

(b) Compulsorily Credited.

(c) Credited only in case the forfeited shares are to be reissued at Discount.

(d) Debited.

Answer:

0 ( b )

Q.21 ESOS stands for:

(a) Equity Shares of Promoters

(b) Equity Shares Optional Scheme

(c) Employee share of Shareholdings

(d) Employee Stock Option Scheme

Answer:

1 ( d )

Q.22 Balance standing in the Share Forfeited Account is ultimately transferred to:

(a) Share Capital Account

(b) Reserve and Surplus Account

(c) Capital Reserve Account

(d) None of the above.

Answer:

2 ( c )

Q.23 A Company forfeited 1,000 shares of Rs.10 each issued at a discount of Rs.1 each on which Rs.6 per share has been called and Rs.2 has been paid, what amount shall be shown under the ‘Calls un paid Account’:

(a) Rs.3,000

(b) Rs.2,000

(c) Rs.6,000

(d) Rs.1,000

Answer:

3 ( a )

Q.24 A Company forfeited 1,000 shares of Rs.10 each at a Premium of Rs.2 each fully called. Rs.5 (including premium) has been paid, what amount shall be shown under the ‘Calls un paid Account’:

(a) Rs.3,000

(b) Rs.7,000

(c) Rs.5,000

(d) Rs.9,000

Answer:

4 ( b )

Q.25 Authorized Capital is:

(a) One which can not be issued without the Authority of Shareholders

(b) One which can not be issued without the approval of Board of Directors

(c) One with which the Company was Registered

(d) One which was issued to the Promoters of the Company

Answer:

5 ( c )

Accounting for share capital

Practice Questions for CUET Accountancy chapter-Accounting Share Capital SET-2

Q.26. What is the formula for prorate allotment of excess of shares:

a) Total share allotted / total shares applied * Share allotted by the firm to shareholder

b) Total shares applied / Total share allotted * Share allotted by the firm to shareholder

c) Share allotted by the firm to shareholder / total shares applied *Total share allotted

d) None

Answer:

b)

Explanation:- Total shares applied / Total share allotted * Share allotted by the firm to shareholder

Q.27. Equity shares issued by a company to its employees or directors at a discount is:-

a) Equity share

b) Private placement shares

c) Preference share

d) Sweat equity shares

Answer:

(d)

Explanation:- Sweat Equity Shares issued by a company to its employees or directors at a discount

Q.28. Value of Right =

a) Market price of the share – Average price of the share

b) Market price of the share * Average price of the share

c) Market price of the share \ Average price of the share

d) Market price of the share + Average price of the share

Answer:

(a)

Explanation:- Market price of the share – Average price of the share

Q.29. Average price of the share=

a) Market price of the share + Issue Price of the Rights Share / Existing shares + Right Share

b) Market price of the share - Issue Price of the Rights Share / Existing shares + Right Share

c) Market price of the share * Issue Price of the Rights Share / Existing shares + Right Share

d) Market price of the share + Issue Price of the Rights Share /*Existing shares + Right Share

Answer:

(a)

Explanation:- Market price of the share + Issue Price of the Rights Share / Existing shares + Right Share