Quiz on Shares and Their Issuance

What is a share in a company?

• A type of insurance policy

• A unit of fixed amount in share capital

• A type of loan given to the company

• A form of government bond

Which type of shares enjoy preferential rights for dividend payment?

• Preference shares

• Equity shares

• Convertible shares

• Debenture shares

What is the minimum subscription mentioned in a prospectus?

• The minimum price of each share

• The minimum amount of share capital required

• The maximum number of shares that can be issued

• The minimum number of shares that must be sold

What is the term for shares issued at a price higher than their face value?

• Shares at par

• Shares at discount

• Shares at market value

• Shares at premium

What does 'calls in arrears' refer to?

• Payments made in advance for shares

• Excess payments received from shareholders

• Amounts not paid on allotment or call money

• Payments made after the due date

What is required for the valid forfeiture of shares?

• The shareholders must agree unanimously

• The shares must be sold immediately

• The company must be in liquidation

• A notice of demand must be given

What is 'sweat equity shares'?

• Shares issued to employees for their services

• Shares issued to the public at a discount

• Shares that cannot be sold

• Shares issued to employees for cash

What is the purpose of the Capital Redemption Reserve?

• To issue new shares

• To cover operational losses

• To redeem preference shares

• To pay dividends to shareholders

What happens in the case of over subscription?

• All applications are accepted

• Excess applications may be rejected

• Only partial payments are accepted

• No shares are issued

What is the journal entry for the application money received?

• Share Application a/c Dr. To Share Capital a/c

• Bank a/c Dr. To Share Application a/c

• Share Application a/c Dr. To Bank a/c

• Share Capital a/c Dr. To Bank a/c