Book- Keeping and Accountancy
STANDARD XII
Chapter 8. Company Accounts - Issue of Shares
Page No. in book (340)
Answer in one sentence only.
1. What is
Preference shares?
Ans. Preference shares are shares in a company that
are owned by people who have the right to receive part of the company's profits
before the holders of ordinary shares are paid.
2. What is
Registered Capital?
Ans. The
amount of capital that a company is officially allowed to get from selling
shares is called Registered Capital.
3. What is
Reserve Capital?
Ans. Reserve Capital is defined as a part of
subscribed uncalled capital, which will not be called up until and unless the
company goes into liquidation.
4. What is Over
subscription of shares?
Ans. When
the number of shares applied for is more than the number of shares the company
has offered/issued to the public it is known as 'Oversubscription'.
5. Which account
is debited when share first call money is received?
Ans. Bank
A/c is debited when share first call
money is received
6. When are
shares allotted on pro-rata basis?
Ans. When
issue share are oversubscribed or when the application received for shares is
more than the number of shares that can be issued. For example, if company
allots 10,000 shares to the applicant of 15,000 shares.
7. What is
forfeiture of shares?
Ans. Forfeiture of shares means cancellation of
shares as such whatever amount has already been received on shares being
forfeited is seized.
8. What is Calls
in Arrears?
Ans. If
the company accept the application and allots the shares to the person he
becomes the shareholder and the shareholder is liable to pay the entire amount
of shares. In case he fails to pay the allotment and calls on shares held by
him the unpaid amount is known as Calls in Arrears.
9. What do you
mean by shares issued at Premium?
Ans. A
company issues its shares at a premium when the price at which it sells the
shares is higher than their par value.
10. What is
Paid-up Capital?
Ans. Paid-up capital is the amount of money a
company has been paid from shareholders in exchange for shares of its stock.
Paid-up capital is created when a company sells its shares on the primary market,
directly to investors.