12th Class Accountancy Accounting For Share Capital Question Bank

done Assertion and Reason - Accounting for Share Capital Total Questions - 7

• question_answer1)

  Assertion [A] :

  A portion of uncalled capital of a company to be called only in the event of winding up of the company, is known as Reserve Capital.

  Reason (R) :

  Company will call the uncalled capital on the due date except the Reserve Capital because It will not be called during the life time of the business. It will be called only the case of winding up.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of the assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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• question_answer2)

  Assertion [A] :

  Amount received on shares as 'Secterities Premium’ can be utilized to write off the 'Share Issue Expenses'.

  Reason (R):

  Amount of Securities Premium can be utilized only for the purposes which are specified in the Section 52 (2) of the Companies Act, 2013.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of the assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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• question_answer3)

  Assertion (A):

  If a company receives subscription less than 90% of the shares offered for subscription, in such a case, company cannot issue shares and amount received on application will be refunded to the applicants.

  Reason (R) :

  As per the Companies Act, 2013, to issue shares to the public, a company must receive 90% or above subscription of the shares offered for subscription.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of the assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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• question_answer4)

  Assertion [A] :

  Incorporation Expenses Account or Preliminary Expenses Account is to be opened when shares are issued to the promote?

  Reason (R) :

  A company may issue shares to its promoters for their services rendered to the company.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of the assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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• question_answer5)

  Assertion [A] :

  When a company purchase a running business of other company, and payment is settled by issue of shares, in such a case, if purchase consideration is more than the net assets, then difference is debited to the. Goodwill Account.

  Reason (R):

  Goodwill is recorded in the books when some money or money's worth is paid for it.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of the assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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• question_answer6)

  Assertion [A] :

  When a running business of other company is purchased, and payment is settled by issue of shares, in such a case, if purchase consideration is less man the net assets, then difference is credited to the Capital Reserve.

  Reason (R) :

  Capital Reserve is a capital loss for the company.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of the assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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• question_answer7)

  Assertion [A] :

  A company may forfeit the shares for non-payment of calls amount depend upon the Articles of Association of the company.

  Reason (R):

  Shares can be forfeited only if it is allowed by the Articles of Association of the company

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of the assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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