Quiz corporate unit 1

Shares issued at an amount higher than face value are said to be issued at:

• Par

• Discount

• Premium

• Book value

The amount received in excess of face value on issue of shares is transferred to:

• Capital Reserve

• Securities Premium Account

• General Reserve

• Profit & Loss Account

Issue of shares at a discount is generally:

• Permissible for all companies

• Prohibited except for sweat equity shares

• Permitted under Companies Act, 2013 for listed firms

• None of the above

The cancellation of shares for non-payment of calls is called:

• Surrender of shares

• Reissue of shares

• Forfeiture of shares

• Redemption of shares

Reissue of forfeited shares cannot be at a price:

• Less than face value

• Less than the amount forfeited

• More than the face value

• Equal to the face value

Prorata allotment is made when:

• Applications are exactly equal to the number of shares offered

• Applications exceed the number of shares offered

• Applications are less than the number of shares offered

• No public issue is made

A right issue is an offer of shares made to:

• Directors

• Existing shareholders

• General public

• Government

Bonus shares are issued out of:

• Securities Premium Account only

• Free reserves, securities premium, or capital redemption reserve

• Fresh capital

• Share application money

Which of the following is not a condition for issuing bonus shares?

• Authorized by Articles

• Issued for cash

• No default in deposits repayment

• Fully paid-up shares

Underwriting is related to:

• Inventory valuation

• Guaranteeing subscription of securities

• Loans from banks

• Amortization of assets