Students who are searching for NCERT MCQ Questions for Chapter 6 Accounting for Share Capital with Answers Pdf free download are compiled here to get good practice on all fundamentals. Know your preparation level on MCQ Questions for Class 12 Accountancy with Answers. You can also verify your answers from our provided Accounting for Share Capital Class 12 MCQs Questions with Answers. So, ace up your preparation with MCQ on Accounting for Share Capital Class 12 Objective Questions.
Accounting for Share Capital Class 12 MCQs Questions with Answers
State which of the following is correct:
Question 1.
A Joint stock company has:
(a) Common Seal
(b) Limited Liability
(c) Separate Legal Entity
(d) All of these
Answer
Answer: (d) All of these
Question 2.
Private company is one which:
(a) Restrict the right of members to transfer shares
(b) Prohibits any invitation to the public to subscribe
(c) Limit the number of members to two hundred
(d) All of the above.
Answer
Answer: (d) All of the above.
Question 3.
Minimum number of members in a public company:
(a) 2
(b) 7
(c) 50
(d) No limit.
Answer
Answer: (b) 7
Question 4.
Minimum number of members in a private company:
(a) 2
(b) 7
(c) 50
(d) No limit.
Answer
Answer: (a) 2
Question 5.
Maximum number of members in a private company:
(a) 7
(b) 50
(c) 100
(d) 200.
Answer
Answer: (d) 200.
Question 6.
Maximum number of members in a public company:
(a) 2
(b) 7
(c) 50
(d) No limit.
Answer
Answer: (d) No limit.
Question 7.
Equity shareholders are the _______ of the company.
(a) Owners
(b) Creditors
(c) Money lenders
(d) Customers.
Answer
Answer: (a) Owners
Question 8.
Debenture holders are the ______ of the company.
(a) Owners
(b) directors
(c) Moneylenders
(d) Customers.
Answer
Answer: (c) Moneylenders
Question 9.
Preference shareholders are the _______ of the company.
(a) First Owners
(b) Second Owners
(c) Money lenders
(d) Customers.
Answer
Answer: (b) Second Owners
Question 10.
Companies in India are governed by companies Act:
(a) 1912
(b) 1976
(c) 1932
(d) All of these.
Answer
Answer: (d) All of these.
Question 11.
_________ is the fractional part of the total Capital of the company.
(a) Share
(b) Debenture
(c) Bond
(d) All of these.
Answer
Answer: (a) Share
Question 12.
______ shares have to be repaid by the company after a specified period.
(a) Equity
(b) Preference
(c) Both equity and preference
(d) All of these.
Answer
Answer: (b) Preference
Question 13.
Rate of return is not fixed on _______.
(a) Preference share
(b) Equity share
(c) Debentures
(d) All of these.
Answer
Answer: (b) Equity share
Question 14.
_________ enjoys the rights of voting.
(a) Equity share holder
(b) Preference share holder
(c) Debenture holder
(d) All of these
Answer
Answer: (a) Equity share holder
Question 15.
________ can not be redeemed during the life time of a company.
(a) Equity shares
(b) Preference shares
(c) Debentures
(d) All of these
Answer
Answer: (a) Equity shares
Question 16.
Shares can be issued at:
(a) Par
(b) Discount (sweat equity)
(c) Premium
(d) All of these
Answer
Answer: (d) All of these
Question 17.
_______ capital is the sum mentioned in capital clause of Memorandum of Association.
(a) Nominal
(b) Authorised
(c) Registered
(d) All of these
Answer
Answer: (d) All of these
Question 18.
________ capital is that portion of uncalled share capital which shall not be called except in the event and for the purpose of the company wound up.
(a) Nominal
(b) Called up
(c) Paid up
(d) Reserve.
Answer
Answer: (d) Reserve.
Question 19.
Issued capital can never be more than _______ capital.
(a) Subscribed
(b) Nominal
(c) Paid up
Answer
Answer: (b) Nominal
Question 20.
When the number of shares applied for is less than the number of shares offered, is called ______ subscription.
(a) minimum
(b) over
(c) under
(d) par
Answer
Answer: (c) under
Question 21.
When the number of shares applied for is more than the number of shares offered, is called ______ subscription.
(a) minimum
(b) over
(c) under
(d) par
Answer
Answer: (b) over
Question 22.
Application money never is less than ________ of face value.
(a) 5%
(b) 10%
(c) 25%
(d) 100%
Answer
Answer: (a) 5%
Question 23.
Minimum subscription amount must be received within _____ subscription list.
(a) 10
(b) 120
(c) 30
(d) 7
Answer
Answer: (c) 30
Question 24.
Maximum paid-up capital in case of OPC is restricted to rupees ______.
(a) ₹ 2,00,000
(b) ₹. 5,00,000
(c) ₹ 50,00,000
(d) ₹ 2,00,00,000
Answer
Answer: (c) X 50,00,000
Question 25.
Calls amount should not exceed _______ of the face value.
(a) 30%
(b) 25%
(c) 90%
(c) 10%
Answer
Answer: (b) 25%
Question 26.
Section ______ of Companies Act provide those conditions which must be followed if share are issued at discount.
(a) 52
(b) 53
(c) 54
(d) 79.
Answer
Answer: (c) 54
Question 27.
Interest on calls arrears will be charged@ _______ pa.
(a) 5%
(b) 6%
(c) 10%
(d) 12%.
Answer
Answer: (c) 10%
Question 28.
Interest on calls in advance will be allowed @ ______ p.a.
(a) 5%
(b) 6%
(c) 10%
(d) 12%.
Answer
Answer: (d) 12%.
Question 29.
Amount received for security premium will be credited to:
(a) Cash Account
(b) Share Capital Account
(c) Capital Reserve
(d) Security Premium Account.
Answer
Answer: (d) Security Premium Account.
Question 30.
Discount (Loss) allowed on Re-issue of shares will be debited to:
(a) Share Discount A/c
(b) Share forfeiture A/c
(c) Profit and Loss A/c
(d) Share Capital A/c.
Answer
Answer: (b) Share forfeiture A/c
Question 31.
Amount of security premium may be called along with:
(a) Application
(b) Allotment
(c) Calls
(d) Any of a,b,c
Answer
Answer: (d) Any of a,b,c
Question 32.
The balance of share forfeiture account after re-issue is transferred to:
(a) Share Capital
(b) Capital Reserve
(c) General Reserve
(d) Security Premium.
Answer
Answer: (b) Capital Reserve
Question 33.
Joy Ltd. issued 1,00,000 equity shares of ₹ 10 each. The amount was payable as follows:
On application -₹ 3 per share.
On allotment – ₹ 4 per share.
On 1st and final call balance.
Applications for 95,000 shares were received and shares were allotted to all the applicants. Sonam to whom 500 shares were allotted failed to pay allotment money and Gautam paid his entire amount due including the amount due on first and final call on the 750 shares allotted to him along with allotment. The amount received on allotment was:
(a) ₹ 3,80,000
(b) ₹ 3,78,000
(c) ₹ 3,80,250
(d) ₹ 4,00,250 (CBSEDelhi 2015)
Answer
Answer: (c) ₹ 3,80,250
Question 34.
Nirman Ltd. issued 50,000 equity shares of ₹ 10 each. The amount was payable as follows:
On application – ₹ 3 per share
On allotment – ₹ 2 per share On first and final call – The balance
Applications for 45,000 shares were received and shares were allotted to all the applicants. Pooja, to whom 500 shares were allotted, paid her entire share money at the time of allotment, whereas Kundan did not pay the first and final call on his 300 shares. The amount received at the time of making first and final call was:
(a) ₹ 2,25,000
(b) ₹ 2,20,000
(c) ₹ 2,21,000
(d) ₹ 2,19,500
Answer
Answer: (c) ₹ 2,21,000
Question 35.
Metacaf Ltd. issued 50,000 shares of ₹ 100 each payable ₹ 20 on application (on 1 st may 2012) ₹ 30 on allotment (on 1st January 2013) ₹ 20 on first call (on 1st July 2013) and the balance on final call (on 1st February 2014). Shankar, a shareholder holding 5,000 shares did not pay the first call on the due date. The second call was made and Shankar paid the first call amount along with the second call. All sums due were received.
(a) ₹ 15,00,000
(b) ₹ 16,00,000
(c) ₹ 10,00,000
(d) ₹ 11,00,000
Answer
Answer: (b) ₹ 16,00,000
Fill in the blanks with correct word:
Question 36.
A portion of share capital that is reserved by the company and will be utilized only on the happening of winding up of the company is called _______.
Answer
Answer: Reserve Capital
Question 37.
Company is an _____ person.
Answer
Answer: artificial
Question 38.
Company is _______ under the provisions of Companies Act 2013.
Answer
Answer: incorporated
Question 39.
Company is an artificial person created by _______.
Answer
Answer: Law
Question 40.
Liability of members of a company is _______ to the extent of the value of shares held by him.
Answer
Answer: Limited
Question 41.
A joint State company has a ______ seal.
Answer
Answer: Common
Question 42.
Reserve capital is the part of _______ capital.
Answer
Answer: 5 Uncalled
Question 43.
Public Ltd. companies arc required to write ________ after their name.
Answer
Answer: Limited
Question 44.
Private Companies are required to use _____ after their names
Answer
Answer: Private Limited
Question 45.
Public Ltd. Company imposes ______ on the transfer of share.
Answer
Answer: No restriction
Question 46.
Shares come into existence when ______ money is demanded.
Answer
Answer: allotment
Question 47.
There is no fixed rate of dividend on ______ .
Answer
Answer: equity shares
Question 48.
On cumulative preference shares, arrears of dividend _________ automatically.
Answer
Answer: accumulate
Question 49.
______ shareholders don’t have normal voting rights.
Answer
Answer: preference
Question 50.
Shares which are not preference shares are called __________ shares.
Answer
Answer: Equity
Question 51.
At the time of forfeiture of shares, ________ will be debited.
Answer
Answer: Share Capital Account
Question 52.
Shares cannot be issued at ___________ to the public.
Answer
Answer: Discount
Question 53.
________ Capital is not a part of balance sheet.
Answer
Answer: Reserve
Question 54.
The purpose of creating __________ capital is to assure security to unsecured creditors.
Answer
Answer: Reserve
Question 55.
Section _______ of the Companies Act., 2013 provides issue of sweat equity shares.
Answer
Answer: 54
Question 56.
Section ________ of Companies Act. 2013 provides for ESOP.
Answer
Answer: 62.
State whether the following statements are true or false:
Question 57.
Minimum number of members in a private limited company is three.
Answer
Answer: False
Question 58.
Maximum number of directors in a company can be fifteen.
Answer
Answer: True
Question 59.
One person company is the extension of sole proprietorship with limited liability.
Answer
Answer: True
Question 60.
Irredeemable preference shares carry the same features as that of equity shares.
Answer
Answer: False
Question 61.
Fixed dividend is allowed on equity shares.
Answer
Answer: False
Question 62.
Preference shareholders have no normal voting rights.
Answer
Answer: True
Question 63.
Equity shareholders are owner of the company.
Answer
Answer: True
Question 64.
Company have perpetual succession.
Answer
Answer: True
Question 65.
If shareholders are unable to pay their dues then company can forfeit their shares.
Answer
Answer: True
Question 66.
Company can forfeit shares without any notice.
Answer
Answer: False
Question 67.
There is no difference between private company and public company.
Answer
Answer: False
Question 68.
Table F deals with calls in arrears.
Answer
Answer: True
Question 69.
Private placement refers to issue of shares privately without disclosing the facts on issue.
Answer
Answer: False
Question 70.
Called up capital may be greater than issued capital.
Answer
Answer: False
Question 71.
Company can exceed the limit of nominal capital through alteration in the memorandum of association.
Answer
Answer: True
Question 72.
Reserve capital and capital reserve are same in nature.
Answer
Answer: False
Question 73.
There is lot of difference between minimum subscription and under subscription.
Answer
Answer: True
Question 74.
Issue of shares at discount can be issued only to directors and employees of a company.
Answer
Answer: True
Question 75.
Securities premium reserves can be used to issue bonus shares to the equity shareholders.
Answer
Answer: True
Question 76.
Called up value on share cannot be more than 25% of the face value of a share.
Answer
Answer: True
One Word Questions:
Question 77.
What is meant by over subscription of shares? (CBSE Compt. 2019)
Answer
Answer: Oversubscription of shares means that the company receives applications for more than the number of shares offered to the public for subscription.
Question 78.
What is meant by ‘par value’ of a share? (CBSE Compt. 2019)
Answer
Answer: Par value is the nominal value or the face value of the share.
Question 79.
Is Reserve Capital a part of Unsubscribed Capital or Uncalled Capital? (CBSE Delhi 2018)
Answer
Answer: Yes.
Question 80.
A company issued 25,000 equity shares of ₹ 10 each but received applications for 30,000 shares. Name the case of subscription.
Answer
Answer: Over subscription
Question 81.
Neelam Limited has the following balances appearing in the balance sheet:
| Securities Premium Reserve | ₹ 22,00,000 |
| 9% Debentures | ₹ 1,20,00,000 |
| Underwriting Commission | ₹ 10,00.000 |
The company decided to redeem its 9% debentures at a premium of 10%. You are required to state how much securities premium amount can be used for redemption of debentures.
Answer
Answer: ₹ 12,00,000.
Question 82.
On 1.1.2016 the first call of ₹ 3 per share became due on 1,00,000 equity shares issued by Kamini Ltd. Karan a holder of 500 shares did not pay the first call money. Arjun a shareholder holding 1000 shares paid the second and final call of ₹ 5 per share along with the first call.
Pass the necessary journal entry for the amount received by opening ‘Calls-in-arrears’ and ‘Calls-in- advance’ account in the books of the company.
Answer
Answer:
Question 83.
Where will you show call in arrears in the balance sheet?
Answer
Answer: As deduction from the subscribed but not fully paid share capital.
Question 84.
Where will you show call in advance in the balance sheet?
Answer
Answer: It is shown under other current liabilities.
Question 85.
At what rate of interest, interest on call in arrears, is charged?
Answer
Answer: 10%p.a.
Question 86.
At what rate interest on calls-in-advance is paid by the company according to Table F of Companies Act, 2013? (CBSE Delhi Compt.2014)
Answer
Answer: As per Table F, company is required to pay interest on the amount of calls in advance @ 12% p.a.
Question 87.
How would you deal in a situation where the value of purchase considerations is more than the value of net assets while acquiring a business?
Answer
Answer: It would refer to loss.
Question 88.
How will you deal in a situation where the value of net assets is more than the value of purchase consideration while acquiring a business?
Answer
Answer: It would refer to gain.
Question 89.
Which account will you debit while issuing the shares to the promoters of a company against their services?
Answer
Answer: Goodwill Account or Incorporation Expenses Account.
Question 90.
When can shares held by a shareholder be forfeited? (CBSE Delhi 2017)
Answer
Answer: On the non-payment of call money due.
Question 91.
An Ltd forfeited a share of 100 issued at a premium of 20% for non-payment of first call of 30 per share and’ final call of 10 per share. State the minimum price at which this share can be reissued. (CBSE Sample Paper 2016)
Answer
Answer: ₹ 40 per share
Question 92.
Give the meaning of forfeiture of share.
Answer
Answer: Cancellation of shares.
Question 93.
At the time of forfeiture of shares, what amount is credited to share forfeiture account?
Answer
Answer: The amount already received.
Question 94.
Where will you show the share forfeited account in the balance sheet of a company?
Answer
Answer: As an addition in the subscribed capital.
Question 95.
What amount of share capital is debited when the shares are forfeited?
Answer
Answer: Called up money.
Question 96.
What amount of share capital is credited when the forfeited shares are reissued?
Answer
Answer: Paid up capital of shares at the time of reissue.
Question 97.
Y Ltd. forfeited 100 equity shares of ₹ 10 each for the non-payment of first call of ₹ 2 per share. The final call of ? 2 per share was yet to be made.
Calculate the maximum amount of discount at which these shares can be re-issued. (CBSE Delhi 2017)
Answer
Answer: ₹ 6 per share or ₹ 600.
Question 98.
If a question is silent on the question of excess money received with application, how would you treat it?
Answer
Answer: In the absence of any information, excess money over the amount due on allotment shall be refunded.
Use the above-provided NCERT MCQ Questions for Class 12 Accountancy Chapter 6 Accounting for Share Capital with Answers Pdf free download and get a good grip on the fundamentals. Need any support from our end during the preparation of CBSE Class 12 Accountancy Accounting for Share Capital MCQs Multiple Choice Questions with Answers then leave your comments below. We’ll revert back to you soon.