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Redemption of Preference Shares

Total questions: 18

Worksheet time: 9mins

Name
Class
Date
1.

A share is a share in the _______ of the company.

a)

share capital

b)

board of directors

c)

memorandum

d)

annual report

2.

A share which gets preference over equity in payment of dividend and repayment of capital at the time of winding up of the company is called _______.

a)

Preference share

b)

Equity share

c)

Debenture

d)

Bonus share

3.

An equity share is a share which is not a _______ share.

a)

preference

b)

bonus

c)

right

d)

debenture

4.

Which of the following is NOT a type of preference share?

a)

Cumulative

b)

Convertible

c)

Participating

d)

Ordinary

5.

Cumulative preference shares get dividend accumulated until it is paid by the company.

a)

True

b)

False

6.

Non-cumulative preference shares get dividend accumulated if it is not paid in a particular year.

a)

True

b)

False

7.

Convertible preference shares have an option of getting converted into _______ shares on a future date, at the option of the shareholder.

a)

equity

b)

preference

c)

debenture

d)

bonus

8.

Non-convertible preference shares do not have any such _______ option.

a)

conversion

b)

voting

c)

redemption

d)

dividend

9.

Participating preference shares have the right to participate in the _______ profit of the company.

a)

surplus

b)

net

c)

gross

d)

dividend

10.

Redeemable preference shares are repaid after completion of term of shares.

a)

True

b)

False

11.

Irredeemable preference shares are repaid only at the time of _______ of the company.

a)

winding up

b)

annual general meeting

c)

issue of shares

d)

declaration of dividend

12.

Divisible profits are the profits which can be used for distribution of _______.

a)

Dividend

b)

Salary

c)

Bonus

d)

Interest

13.

When preference shares are redeemed, the share capital of the company will _______.

a)

reduce

b)

increase

c)

remain the same

d)

fluctuate

14.

CRR can be utilised only for issuing fully paid _______ shares.

a)

bonus

b)

equity

c)

preference

d)

debenture

15.

Fill in the blank: The journal entry for creation of CRR is

a)

Divisible profit To CRR

b)

CRR To Divisible profit

c)

Profit & Loss To CRR

d)

CRR To Profit & Loss

16.

What is the journal entry for the amount paid to preference shareholders?

a)

Preference shareholders To Bank

b)

Bank To Preference shareholders

c)

Profit & Loss Appropriation To Preference shareholders

d)

Preference shareholders To Profit & Loss Appropriation

17.

What is the journal entry for writing off premium on redemption (POR)?

a)

Divisible profits To POR

b)

POR To Divisible profits

c)

Bank To POR

d)

POR To Bank

18.

What is the journal entry for bonus transferred when issuing bonus shares?

a)

Bonus to shareholders To Equity share capital

b)

Equity share capital To Bonus to shareholders

c)

Bonus to shareholders To Securities premium

d)

Profit and Loss Account To Equity share capital