Commerce Accountancy · Economics

Equity Shares and Capital

505 Questions

Equity shares and capital topics deal with corporate share issuance, forfeiture rules, dividend distributions, and yield calculations. Questions require an understanding of financial instruments like preference shares and call options. These concepts are essential for accountancy and commerce examinations.

Share valuationDividend yieldPreference sharesShare forfeitureCapital structure

Equity Shares and Capital Questions

Multiple choice maths fundamental concept of ratio and proportion division problem dividing a quantity in a given ratio problems on ratios

$Rs. 2430$ are distributed among three persons so that their shares be diminished by $Rs. 5, Rs. 10$ and $Rs. 15$ respectively, the remainder shall be in the ratio $3 : 4 : 5.$ The share of $C$ is

  1. $Rs. 1015$
  2. $Rs. 605$
  3. $Rs. 810$
  4. $Rs. 1415$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Let $Rs. 2430$ be divided among three persons with their shares as $x, y$ and $z$ respectively so that $x + y + z = 2430$
Given, $x - 5 : y - 10 : z - 15 = 3 : 4 : 5$
$\Rightarrow x- 5 = 3k, y - 10 = 4k $ and $ z - 15 = 5 k$
$\Rightarrow x = 3k + 5, y = 4k + 10$ and $z = 5k + 15$
$\therefore 3k + 5 + 4k + 10 + 5k + 15 = 2430$
$\Rightarrow 12k + 30 = 2430    \Rightarrow 12 k = 2400 \Rightarrow k = 200$
$\therefore$ C's share $= z = 5k + 15 = 5 \times 200 + 15 = Rs. 1015$

Multiple choice maths fundamental concept of ratio and proportion division problem dividing a quantity in a given ratio problems on ratios

Rs.$120$ are divided among A,B,C such that A" share is Rs.$20$ more than B"s and Rs.$20$ less than C"s. What is B"s share?

  1. Rs.$10$
  2. Rs.$20$
  3. Rs.$30$
  4. Rs.$40$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let C=x. Then $A=\begin{pmatrix}x-20\end{pmatrix}$ and $B=\begin{pmatrix}x-40\end{pmatrix}$.
$x+x-20+x-40=120$ Or $x=60$
$A:B:C=40:20:60=2:1:3$
B"s share $=Rs.120\times \dfrac{1}{6}=Rs.20$

Multiple choice book keeping and accountancy accounting equation meaning, objectives and need of adjustments need for adjustments accounting equations and transactions

Constant growth rate is 7.2% and an expected rate of return is 12.5% then expected dividend yield will be ___________.

  1. 5.30%

  2. 19.70%

  3. -5.30%

  4. 17.36%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The expected rate of return is the sum of the dividend yield and the growth rate. Therefore, Dividend Yield = Expected Rate of Return - Growth Rate = 12.5% - 7.2% = 5.30%.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

$1.$ Providing only for the holding company's share of unrealised profit is more popular.
$2.$ The holding company's share of the unrealised profit should be reduced from the stock on the asset's side of the consolidated Balance Sheet
$3.$ The holding company's share of unrealised profit should be reduced from the profit and loss account on the liabilities side of the consolidated Balance Sheet.
$4.$ The approach of making a provision for the entire profit included in the stock is preferred by the American Institute of Certified Public Accountants (AICPA)
Of these.

  1. $1$ and $3$ are correct
  2. $2$ and $4$ are correct
  3. $1$ and $4$ are correct

  4. All are correct
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Because

1. In order words, for you to realize profits from an investment you've made, you  Popular Stocks . Because you would still be holding on to all of your 1,000 shares, you .To learn more about profit realization and its implications for ... This unrealized gain would become realized only if you sell the security.
2.In short, holding company's share of unrealized profit should be deducted from the Consolidated Stock in the assets side of the Consolidated Balance Sheet ... of Goodwill will be reduced by the amount of increased value of paid-up shares.
3.In short, holding company's share of unrealized profit should be deducted from the Consolidated Stock in the assets side of the Consolidated Balance Sheet and the same amount should also be deducted from the Profit and Loss Account in the Consolidated Balance Sheet.
4.The American Institute of CPAs (AICPA) is a non-profit organization of Certified Public Accountants. Learn which job is right for you: salary, personality, skills, certifications etc. in the United States. It was established in 1887, and its role is to create and grade the Certified Public Accountant (CPA) examinations.

Multiple choice elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

Upon dissolution of Firm, the Surplus left after settlement of the debts and liabilities of the Firm shall be ______________.

  1. credited to the Reserve Account

  2. credited to the Government of India A/c

  3. distributed among the Partners equally

  4. distributed among the Partners according to their rights.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to the Indian Partnership Act, after settling all debts and liabilities, any remaining surplus must be distributed among the partners in accordance with their rights as defined in the partnership agreement.

Multiple choice elements of business ownership structures - joint stock company meaning and objectives of public sector enterprises introduction to public sector organisations types of companies - private & public

Minimum paid up share capital in case of a public company is _______.

  1. 1 Lakh

  2. 3 Lakhs

  3. 5 Lakhs

  4. 7 Lakhs
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to the provisions of the Indian Companies Act, 2013, minimum paid up share capital in case of a public company is Rs. 5 lakhs.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company
The applicants who are allotted shares will be sent ___________ letter.

  1. regret

  2. allotment

  3. enquiry

  4. request
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Share allotment letter is a document that details and confirms the amount or number of securities allotted to an applicant for a new issue or a rights issue.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company
Share Certificate must be issued within ______ months from the date of allotment of shares.

  1. two

  2. six

  3. nine

  4. ten
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to the Companies Act, a company is required to issue share certificates to allottees within two months from the date of allotment.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

A company may allot fully paid shares to promoters or any other party for the services rendered by them, share capital account is credited and ___________ debited.

  1. Preliminary expenses account

  2. Goodwill account

  3. Capital reserve account

  4. Suspense account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When a company issues shares to promoters for services rendered, the value of those services is typically capitalized as goodwill. Therefore, the Goodwill account is debited to record the asset, and the Share Capital account is credited.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

If a company makes default in holding AGM, then fine imposed on the company & every officer of the company who is in default is upto ___________.

  1. 25,000

  2. 50,000

  3. 5,000

  4. 1,00,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

If a company makes default in holding an annual general meeting.

Fine which may extend to Rs. 1,00,000 on the company and every officer of the company who is in default may be levied and for continuing default, with a further fine of Rs. 2500 per day during which the default continues may be levied.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

Select the correct option given below :

Remuneration paid to the Managing Director shall not exceed ___ of the net profit.

  1. 5 %

  2. 10 %

  3. 11 %

  4. 15%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Managerial Persons covered are Managing Director, Whole-time  Director, Part time Directors and managers who shall be paid remuneration subject to and in accordance with provisions of Section 197 of the Companies Act, 2013. As compared to various sections and chapters viz section 198, 309, etc of Companies Act, 1956 which deals with Managerial remunerations separately, the new Act has solved this issue by consolidating all provisions under a single provision of 197. According to  Companies Act, 2013 remuneration paid to the managing director shall not be exceed 5% of the net profit.