Chapter 6 ACCOUNTANCY : Company Accounts — Online MCQ Test
ACCOUNTANCY · CLASS 12 INTER II YEAR · Andhra State Board
Practice Chapter 6 ACCOUNTANCY : Company Accounts with a free chapter-wise online MCQ test.
This chapter covers: This chapter details accounting for share capital issue of shares at par premium discount calls in arrears calls in advance forfeiture and reissue of forfeited shares..
AI-generated questions from basic to board-exam level, with instant results and explanations.
Chapter 6 ACCOUNTANCY : Company Accounts — Important Questions & Answers
What is the maximum amount of discount allowed on the reissue of forfeited shares?
- A. 10% of face value
- B. Amount not exceeding the amount forfeited on the reissued shares
- C. 5% of paid-up value
- D. Full face value
Answer: B. Amount not exceeding the amount forfeited on the reissued shares
A company can reissue forfeited shares at a discount provided the discount does not exceed the amount already received on such shares.
A company can reissue forfeited shares at a discount provided the discount does not exceed the amount already received on such shares.
Which account is credited when shares are forfeited?
- A. Share Capital A/c
- B. Share Forfeited A/c
- C. Calls-in-arrears A/c
- D. Bank A/c
Answer: B. Share Forfeited A/c
On forfeiture, the share capital account is debited, and the share forfeited account is credited with the amount received so far.
On forfeiture, the share capital account is debited, and the share forfeited account is credited with the amount received so far.
If a share of Rs 10 on which Rs 8 is called up and Rs 6 is paid is forfeited, the Share Capital Account should be debited with:
- A. Rs 10
- B. Rs 6
- C. Rs 8
- D. Rs 2
Answer: C. Rs 8
Share capital should be debited with the amount called up on the forfeited shares, which is Rs 8.
Share capital should be debited with the amount called up on the forfeited shares, which is Rs 8.
If 500 shares of Rs 10 each were forfeited for non-payment of final call of Rs 3, and 300 shares were reissued at Rs 8 per share fully paid up, the amount transferred to Capital Reserve is:
- A. Rs 2100
- B. Rs 1500
- C. Rs 2400
- D. Rs 1200
Answer: B. Rs 1500
Amount forfeited per share is Rs 7. Discount on reissue is Rs 2 per share. Profit per share is Rs 5. For 300 shares, 300 x 5 = Rs 1500.
Amount forfeited per share is Rs 7. Discount on reissue is Rs 2 per share. Profit per share is Rs 5. For 300 shares, 300 x 5 = Rs 1500.
What is the accounting treatment when shares are issued for consideration other than cash (e.g., to promoters)?
- A. Debit Goodwill/Assets, Credit Share Capital
- B. Debit Share Capital, Credit Bank
- C. Debit Cash, Credit Share Capital
- D. No entry required
Answer: A. Debit Goodwill/Assets, Credit Share Capital
When shares are issued for assets or services, the asset or service (goodwill/incorporation expenses) is debited and share capital is credited.
When shares are issued for assets or services, the asset or service (goodwill/incorporation expenses) is debited and share capital is credited.