Issue of shares MCQ Test - 1

Under the provisions of the Companies Act, the company can issue_______.

• Only equity shares

• Only preference shares

• Preference shares and equity shares

• None of the above

Premium on the issue of shares is shown on which side of the balance sheet?

• Assets

• Liabilities

• Both assets and liabilities

• None of the above

Question. Arrange the following in proper sequence as types of "Share Capital"

(a) Paid up capital

(b) Issued capital

(c) Subscribed capital

(d) Called up capital

• a,b,c,d

• b,c,d,a

• b,c,a,d

• b,d,c,a

Minimum no. of directors in a Pvt. Ltd. company

• 3

• 2

• 4

• No limit

Amount of money not received out of called up capital is:

• Added to share capital

• Subtracted from share capital

• Shown as current liabilities

• Shown as current Assets

Answer explanation

Calls in Arrears subtracted from share capital

Question: The following statements apply to equity/preference shareholders. Which one of them applies only to preference sharehoders?

(a) Shareholders risk the loss of investment

(b) Shareholders bear the risk of no dividends in the event of losses

(c) Shareholders usually have the right to vote

(d) Dividends are usually given at a set amount in every financial year

• a

• b

• c

• d

Question: Authorised Capital of a Company is mentioned in:

• (a) Memorandum of Association

• (b) Articles of Association

• (c) Prospectus

• (d) Statement in lieu of Prospectus

Which of the following statement is/are true?

(i) Authorized Capital < Issued Capital

(ii) Authorized Capital ≥ Issued Capital

(iii) Subscribed Capital ≤ Issued Capital

(iv) Subscribed Capital > Issued Capital

• (A) (i) only

• (B) (i) and (iv) Both

• (C) (ii) and (iii) Both

• (D) (ii) only

Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).

Assertion (A): Equity shares do not carry fixed rate of dividend and they are the ultimate risk bearer.

Reason (R): Equity shareholders are getting dividend from residual part of profits and in the case of winding-up of the company, invested money will be refunded at the last.

In the context of the above statements, which one of the following is correct?

• (A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

• (B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• (C) Assertion (A) is true, but Reason (R) is false.

• (D) Assertion (A) is false, but Reason (R) is true.

The difference between subscribed capital and called up capital is called :

• (A) Calls-in-arrear

• (B) Calls-in-advance

• (C) Uncalled capital

• (D) None of these