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WorksheetsCorporate Finance Concepts Quiz
Total questions: 89
Worksheet time: 45mins
Which of the following concepts are mentioned as important in corporate finance according to the introduction?
Shares, Share Capital, Debentures, and Bonds
Loans, Mortgages, Insurance, and Taxes
Assets, Liabilities, Revenue, and Expenses
Dividends, Profits, Losses, and Salaries
Which of the following is an objective of the unit?
Define and classify shares and share capital
Learn about the history of accounting
Study international trade laws
Understand marketing strategies
What does the unit aim to help students understand regarding shares?
Issue and buyback of shares
How to calculate interest rates
The process of company mergers
The basics of supply and demand
Which financial instruments are students expected to learn about in this unit?
Debentures and bonds
Credit cards and loans
Mutual funds and ETFs
Savings accounts and fixed deposits
What type of accounting records are students expected to be able to make after this unit?
Relevant journal entries
Annual financial statements
Tax returns
Payroll calculations
Which skill related to practical application is included in the unit objectives?
Solve related practical problems
Write business proposals
Design marketing campaigns
Conduct employee interviews
What is a share in the context of a company?
A unit of ownership in a company
A type of loan given to a company
A form of employee benefit
A company’s physical asset
What does share capital refer to?
The total capital raised via shares
The profit earned by a company
The amount paid as dividends
The value of company’s assets
Which of the following is NOT a type of share mentioned in the material?
Equity Shares
Preference Shares
Debenture Shares
None of the above
Which of the following is NOT a type of share capital?
Authorized Capital
Issued Capital
Subscribed Capital
Borrowed Capital
Which of the following is a type of share capital?
Paid-up Capital
Working Capital
Fixed Capital
Floating Capital
How many types of share capital are listed in the provided material?
Four
Two
Three
Five
Which of the following is NOT a method of issuing shares?
Public Issue
Private Placement
Rights Issue
Stock Buyback
What is the term for issuing shares to the general public?
Public Issue
Private Placement
Bonus Issue
Rights Issue
Which method of issuing shares involves offering them to a select group of investors rather than the general public?
Private Placement
Public Issue
Bonus Issue
At Par Issue
What is it called when a company offers additional shares to its existing shareholders?
Rights Issue
Public Issue
Private Placement
At Discount Issue
When shares are issued to existing shareholders free of cost, what is this called?
Bonus Issue
Rights Issue
Public Issue
Private Placement
Which of the following is NOT a price at which shares can be issued?
At par
At premium
At discount
At loss
What is the correct journal entry for the issue of shares?
Bank A/c Dr. To Share Capital A/c
Share Capital A/c Dr. To Bank A/c
Bank A/c Dr. To Sales A/c
Sales A/c Dr. To Share Capital A/c
In the journal entry for the issue of shares, which account is debited?
Share Capital A/c
Bank A/c
Sales A/c
Cash A/c
What is the narration commonly used for the journal entry of share issue?
Being purchase of goods
Being issue of shares
Being payment of salary
Being receipt of loan
Which of the following is NOT a stage in the payment of share issue installments?
Application Money
Allotment Money
First Call
Dividend Payment
What is the purpose of journal entries in the context of share issue payments in installments?
To record transactions at each stage of payment
To calculate company profits
To determine share prices
To pay dividends to shareholders
Which stage comes after the "First Call" in the process of share issue payments?
Final Call
Application Money
Allotment Money
Dividend Payment
What is the face value of the share in the given installment-wise example?
₹10
₹3
₹4
₹5
How much is paid at the application stage in the installment-wise example?
₹3
₹4
₹10
NIL
What is the amount paid at the allotment stage according to the example?
₹4
₹3
₹10
NIL
How much is required to be paid at the first call in the installment-wise example?
₹3
₹4
₹10
NIL
What is the amount required at the final call in the given example?
NIL
₹3
₹4
₹10
What is the correct journal entry for the application money received in the bank for ₹30,000?
Bank A/c Dr. ₹30,000 To Share Application A/c ₹30,000
Share Application A/c Dr. ₹30,000 To Bank A/c ₹30,000
Bank A/c Dr. ₹15,000 To Share Application A/c ₹15,000
Share Capital A/c Dr. ₹30,000 To Bank A/c ₹30,000
What is the correct journal entry for the allotment of shares amounting to ₹40,000?
Share Allotment A/c Dr. ₹40,000 To Share Capital A/c ₹40,000
Share Capital A/c Dr. ₹40,000 To Share Allotment A/c ₹40,000
Bank A/c Dr. ₹40,000 To Share Capital A/c ₹40,000
Share Allotment A/c Dr. ₹20,000 To Share Capital A/c ₹20,000
Which account is debited when the company receives the allotment money from shareholders?
Share Capital A/c
Share Allotment A/c
Bank A/c
Profit and Loss A/c
What is the corresponding credit entry when Bank A/c is debited for ₹40,000 on receipt of share allotment money?
To Share Capital A/c ₹40,000
To Share Allotment A/c ₹40,000
To Profit and Loss A/c ₹40,000
To Bank A/c ₹40,000
What does a company do during a buyback of shares?
Buys back its own shares
Issues new shares to the public
Sells assets to other companies
Increases its share capital
What is one effect of a share buyback on a company's share capital?
Reduces share capital
Increases share capital
Has no effect on share capital
Doubles the share capital
Which legal requirement must a company follow when conducting a buyback of shares?
Must comply with Companies Act provisions
Must get approval from shareholders only
Must notify the stock exchange only
Must increase dividends
Which of the following accounts is debited in the buyback entry?
Share Capital A/c
Bank A/c
Capital Redemption Reserve A/c
Profit and Loss A/c
In the buyback entry, which account is credited?
Share Capital A/c
Premium Payable on Buyback A/c
Bank A/c
Securities Premium A/c
What is the purpose of the Capital Redemption Reserve A/c in the buyback entry?
To record the amount transferred from profits for share buyback
To record the premium paid on buyback
To record the payment to shareholders
To record the issue of new shares
Which account is used to record the premium payable on buyback in the buyback entry?
Premium Payable on Buyback A/c
Securities Premium A/c
General Reserve A/c
Profit and Loss A/c
What is a debenture?
Long-term borrowed capital
Short-term investment
Equity share
Government grant
Who can issue bonds?
Only individuals
Only companies
Only banks
Government or companies
Which of the following is NOT a type of debenture or bond mentioned in the material?
Convertible
Non-convertible
Secured/Unsecured
Perpetual
What is the correct journal entry for the issue of debentures?
Bank A/c Dr. To Debentures A/c
Debentures A/c Dr. To Bank A/c
Cash A/c Dr. To Debentures A/c
Debentures A/c Dr. To Cash A/c
When debentures are issued, which account is debited in the journal entry?
Bank Account
Debentures Account
Cash Account
Capital Account
What is the narration used in the journal entry for the issue of debentures?
Being debentures issued
Being shares allotted
Being debentures redeemed
Being interest paid
When debentures are issued at a discount, which accounts are debited?
Bank A/c and Discount A/c
Bank A/c and Premium A/c
Debentures A/c and Premium A/c
Debentures A/c and Discount A/c
When debentures are issued at a premium, which account is credited along with Debentures A/c?
Discount A/c
Premium A/c
Bank A/c
Interest A/c
In the journal entry for debentures issued at a discount, which account is credited?
Bank A/c
Discount A/c
Debentures A/c
Premium A/c
Which of the following is NOT part of the journal entry for debentures issued at a premium?
Bank A/c Dr.
To Debentures A/c
To Premium A/c
Discount A/c Dr.
What is the correct journal entry for the payment of interest on debentures?
Debenture Interest A/c Dr. To Bank A/c
Bank A/c Dr. To Debenture Interest A/c
Interest A/c Dr. To Debenture A/c
Debenture A/c Dr. To Interest A/c
In the journal entry "Debenture Interest A/c Dr. To Bank A/c", what does this entry represent?
Payment of interest on debentures
Receipt of interest on debentures
Issue of debentures
Redemption of debentures
What is the correct journal entry for the redemption of debentures?
Debentures A/c Dr. To Bank A/c
Bank A/c Dr. To Debentures A/c
Debentures A/c Dr. To Cash A/c
Bank A/c Dr. To Share Capital A/c
In the context of debenture redemption, what does the entry "Debentures A/c Dr. To Bank A/c" signify?
Debentures are being redeemed
Debentures are being issued
Shares are being issued
Bank loan is being repaid
How many equity shares did ABC Ltd. issue?
10,000
5,000
1,000
20,000
What was the face value of each equity share issued by ABC Ltd.?
₹10
₹2
₹5
₹3
At what premium were the shares issued by ABC Ltd.?
₹2
₹3
₹5
₹4
How much was received on application per share?
₹3
₹5
₹4
₹2
How much was received on allotment per share (including premium)?
₹5
₹3
₹4
₹2
How much was received on the first and final call per share?
₹4
₹3
₹5
₹2
A company issued 5,000 debentures of ₹100 each at a 5% discount. What is the total amount of discount allowed by the company?
₹25,000
₹5,000
₹50,000
₹10,000
If a company issues 5,000 debentures of ₹100 each at a 5% discount, what is the amount actually received by the company?
₹475,000
₹500,000
₹525,000
₹450,000
When a company issues debentures at a discount, which of the following is true?
The company receives less than the face value of the debentures.
The company receives more than the face value of the debentures.
The company receives exactly the face value of the debentures.
The company does not receive any money.
What do shares represent in a company?
Ownership
Debt
Liability
Expense
What is share capital composed of?
Equity and preference
Debt and equity
Preference and liability
Equity and assets
How can the issue of shares be conducted?
In stages
Only at once
Only after buyback
Only for debentures
Which of the following is allowed regarding shares?
Buyback
Only issuance
Only transfer
Only conversion to debentures
What are debentures classified as?
Debt instruments
Equity instruments
Ownership shares
Preference shares
Which of the following is a type of share that gives the holder ownership in a company and voting rights?
Equity Shares
Preference Shares
Debentures
Bonds
Which type of shares typically have a fixed dividend and priority over equity shares in the payment of dividends?
Preference Shares
Equity Shares
Bonds
Buyback
What term refers to the total amount of capital raised by a company through the issue of shares?
Share Capital
Buyback
Debentures
Bonds
What is the process called when a company repurchases its own shares from the shareholders?
Buyback
Debentures
Bonds
Share Capital
Which of the following is a type of long-term debt instrument issued by companies to borrow money?
Debentures
Equity Shares
Preference Shares
Buyback
Which financial instrument is typically issued by governments or corporations and represents a loan made by an investor to the issuer?
Bonds
Equity Shares
Preference Shares
Buyback
Buyback of shares leads to:
Increase in share capital
Reduction in share capital
No change
Increase in liabilities
Debenture holders are:
Owners
Debtors
Creditors
Shareholders
What is a share and what are the types of share capital?
A share is a unit of ownership in a company; types include equity and preference share capital.
A share is a loan given to a company; types include secured and unsecured share capital.
A share is a type of bond; types include government and corporate share capital.
A share is a form of currency; types include domestic and foreign share capital.
Which of the following best explains the process of share issue in installments?
Shares are issued to investors in multiple payments over time.
Shares are issued only after the company is dissolved.
Shares are issued as a single lump sum payment.
Shares are issued only to company employees.
What are debentures and how are they redeemed?
Debentures are long-term debt instruments that are redeemed by repaying the principal amount to holders.
Debentures are shares that are redeemed by issuing more shares.
Debentures are short-term loans that are never redeemed.
Debentures are a type of currency that is redeemed at banks.
State the differences between shares and debentures.
Shares represent ownership in a company, while debentures are a form of loan to the company.
Shares are always repaid after a fixed period, while debentures are never repaid.
Debentures give voting rights, while shares do not.
Shares are a form of debt, while debentures are a form of equity.
Which of the following best describes the buyback of shares with legal provisions?
A company repurchases its own shares in accordance with specific legal regulations.
A company issues new shares to the public.
A company merges with another company.
A company distributes dividends to shareholders.
What is the face value of each share mentioned in the practical problems?
₹10
₹2
₹12
₹1,000
How many shares are issued according to the practical problems?
1,000
10
100
2,000
At what premium are the shares issued in the practical problems?
₹2
₹10
₹12
₹1
Which of the following is NOT mentioned as a practical problem in the document?
Shares issued at a loss
Issue of 1,000 shares at ₹10 each with ₹2 premium
Payment received in installments
Debentures issued at discount
Which of the following is NOT mentioned as a practical problem in section 7.10.3?
Redemption of debentures
Interest on debentures
Share forfeiture and reissue
Calculation of dividends
Which topic is included in the list of practical problems in section 7.10.3?
Redemption of debentures
Preparation of balance sheet
Calculation of goodwill
Depreciation of assets
What is one of the practical problems related to debentures mentioned in section 7.10.3?
Interest on debentures
Amortization of patents
Inventory valuation
Cash flow analysis
Which of the following is a process involving company shares mentioned in section 7.10.3?
Share forfeiture and reissue
Share splitting
Share consolidation
Share buyback
