Module 1 - Internal Reconstruction

For writing off of all the accumulated losses under the scheme of capital reduction, debit______

• Share capital A/c

• Capital Reduction A/c

• All other losses

• Goodwill A/c

The term Internal Reconstruction means

• Reduction of share capital

• Alteration of share capital

• variation of shareholder's right

• All of the above

When the arrears of Preference is dividend is cancelled what will happen?

• Debit Preference Dividend A/c

• Credit Preference Dividend A/c

• No entry required

• Debit Preference share capital A/c

If the shares of small denominations are converted into the shares of higher denomination without changing the total amount of share capital then it is a case of

• Sub division of shares

• Consolidation of shares

• Decrease in unissued share capital

• Increase in unissued share capital

If there is any surplus available in capital reduction account after writing off of all the accumulated losses, then it can be transferred to ________

• General Reserve A/c

• Capital Reserve A/c

• Profit and Loss A/c

• Retained Earnings

A Company has issued capital of 10,000 equity shares of Rs.10 each fully paid. It decides to convert its capital into 20,000 equity shares of Rs.5 each. It is a case of

• Consolidation of shares

• Subdivision of shares

• Capital Reduction with surrender

• None of these

Balance of shares surrendered but not re-issued transferred to________

• Profit & Loss A/c

• Realisation A/c

• Capital Reduction A/c

• Revaluation A/c

In case of sub division of share capital the total number of shares:

• Increases

• Decreases

• Does not change

• Decrease to certain extent

If the creditors are willing to reduce their claims against the company then the amount of reduction in their claim can be transferred to

• Share Capital A/c

• Creditors A/c

• Capital Reduction A/c

• Capital Reserve A/c

A Ltd., with a share capital of 10,000 equity shares of Rs.10 each fully paid decides to repay Rs.5 per share thus making each share of Rs.5 fully paid up. It is a case of:

• Reducing the paid up capital

• Reducing the liability on account of uncalled capital

• Increasing the paid up capital

• Reducing the share capital by returning the excess capital