What is the purpose of a company's common seal?

Correct Option: B. Solution: A company's common seal is used as its signature.

Accounting for Share Capital

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Summary

Summary of Accounting for Share Capital

Key Terms

Joint Stock Company: An organization consisting of shareholders.
Share Capital: Capital raised by issuing shares.
Authorized Capital: Maximum capital a company can raise.
Issued Capital: Portion of authorized capital that has been issued to shareholders.
Paid-up Capital: Amount paid by shareholders for shares.
Preference Shares: Shares with preferential rights to dividends.
Equity Shares: Shares without preferential rights.

Stages of Share Issue

Application for Shares: Initial request for shares.
Allotment of Shares: Distribution of shares to applicants.
Calls on Shares: Requests for payment on shares.

Types of Shares

Preference Shares: Fixed dividend, preferential repayment.
Equity Shares: Variable dividend, no preferential rights.

Accounting Treatments

Forfeiture of Shares: Cancellation of shares due to non-payment.
Reissue of Forfeited Shares: Shares can be reissued, possibly at a discount.
Calls in Arrears: Amount not received from shareholders.
Calls in Advance: Amount paid by shareholders before due.

Common Issues

Over Subscription: More applications than shares available.
Under Subscription: Fewer applications than shares available.

Important Concepts

Securities Premium: Amount received over the nominal value of shares.
Discount on Shares: Issuing shares below nominal value, regulated by law.

Learning Objectives

After studying this chapter, you will be able to:

Explain the basic nature of a joint stock company as a form of business organisation and the various kinds of companies based on liability of their members.
Describe the types of shares issued by a company.
Explain the accounting treatment of shares issued at par, at premium, and at discount including oversubscription.
Outline the accounting for forfeiture of shares and reissue of forfeited shares under varying situations.
Workout the amounts to be transferred to capital reserve when forfeited shares are reissued.
Prepare share forfeited account.

Detailed Notes

Accounting for Share Capital

1. Introduction

A company is an organization formed by shareholders who contribute capital.
Shareholders elect a Board of Directors to manage the company.
Governed by the Companies Act, 2013.

2. Features of a Company

Artificial person with a distinct legal entity.
Has a common seal for signature.

3. Types of Companies

Joint Stock Company: Owned by shareholders.
Types of Shares:
- Equity Shares: No preferential rights.
- Preference Shares: Preferential rights to dividends and capital repayment.

4. Share Capital

Share Capital: Raised through issuing shares.
Can be issued for cash or consideration other than cash.
Stages of Share Issue:
1. Application for shares
2. Allotment of shares
3. Calls on shares

5. Key Terms

Calls in Arrears: Amount not received from shareholders.
Calls in Advance: Amount paid by shareholders before due.
Over Subscription: More applications than shares available.
Under Subscription: Fewer applications than shares available.

6. Accounting Treatment

Forfeiture of Shares: Shares can be forfeited for non-payment.
Reissue of Forfeited Shares: Can be reissued at a discount.
Securities Premium: Amount received over the nominal value of shares.

7. Common Mistakes

Not maintaining a separate Calls-in-Arrears Account.
Failing to comply with legal provisions for issuing shares at a discount.

8. Practice Questions

Define a public company.
Explain the process of share allotment in case of over subscription.
Discuss the conditions for issuing shares at a discount.

Exam Tips & Common Mistakes

Common Mistakes and Exam Tips

Common Pitfalls

Misunderstanding Share Types: Students often confuse preference shares with equity shares. Remember, preference shares have preferential rights to dividends and capital repayment.
Forfeiture Accounting: Failing to correctly account for forfeited shares can lead to significant errors in financial statements. Ensure you understand the treatment of amounts received prior to forfeiture.
Discount on Shares: Students may overlook the legal restrictions on issuing shares at a discount. Only sweat equity shares can be issued at a discount under the Companies Act, 2013.
Calls in Arrears vs. Calls in Advance: Confusion between these two terms is common. Calls in arrears refer to unpaid amounts on shares, while calls in advance are amounts paid by shareholders before they are due.
Over Subscription Handling: Not properly adjusting for over subscription can lead to incorrect allotment entries. Always ensure the minimum subscription is met before proceeding with allotments.

Exam Tips

Understand Key Definitions: Make sure you can define and differentiate between key terms such as share capital, issued capital, and subscribed capital.
Practice Journal Entries: Regularly practice recording journal entries for share transactions, including forfeitures and reissues, to build confidence.
Review Legal Provisions: Familiarize yourself with the Companies Act, 2013, especially sections related to share issuance and capital management.
Use Examples: When studying, refer to numerical examples to understand the practical application of concepts.
Time Management: During exams, allocate time wisely to ensure you can answer all questions, especially those requiring calculations.

Practice & Assessment

Multiple Choice Questions

It is an artificial person with a separate legal entity.

It has a common seal for its signature.

Its shareholders are directly involved in day-to-day management.

It can sue and be sued in its own name.

Correct Answer: C

Solution:

A joint stock company is managed by a Board of Directors elected by the shareholders, who are not directly involved in day-to-day management.

The shares are issued at a price higher than their nominal value

The shares are issued at a price lower than their nominal value

The shares are issued at their nominal value

The shares cannot be issued at a premium

Correct Answer: A

Solution:

When shares are issued at a premium, they are issued at a price higher than their nominal value, and the premium amount is credited to the Securities Premium Reserve Account.

To manage the day-to-day operations of the company

To oversee the issuance of shares and manage the company's capital

To represent the shareholders in the management of the company

To ensure compliance with the Companies Act, 2013

Correct Answer: C

Solution:

The Board of Directors is elected by the shareholders to represent them and manage the affairs of the company, as shareholders cannot participate directly in management.

More shares are issued than authorized

Applications for more shares are received than offered

Shares are issued at a higher price than their nominal value

Shares are issued at a discount

Correct Answer: B

Solution:

Over subscription means that applications for more shares are received than the number offered for subscription.

Calls in Advance

Calls in Arrears

Share Premium

Share Discount

Correct Answer: B

Solution:

Calls in Arrears refers to the amount not received from shareholders on calls.

Share Premium

Share Forfeiture

Share Discount

Share Capital

Correct Answer: B

Solution:

The cancellation of shares due to non-payment by shareholders is called 'Share Forfeiture'.

Credited to Share Capital Account

Debited to Share Capital Account

Credited to Forfeiture Shares Account

Debited to Forfeiture Shares Account

Correct Answer: C

Solution:

The amount received on forfeited shares is credited to the Forfeiture Shares Account.

Issue at Par

Issue at Premium

Issue at Discount

Issue at Face Value

Correct Answer: C

Solution:

Issuing shares at a price lower than their nominal value is called 'Issue at Discount'.

Share Capital Account

Bank Account

Share Forfeiture Account

Securities Premium Reserve Account

Correct Answer: C

Solution:

When shares are forfeited, the amount already received on such shares is credited to the Share Forfeiture Account.

The shares are automatically transferred to another shareholder

The shares are forfeited

The shareholder is fined

Nothing happens

Correct Answer: B

Solution:

If a shareholder fails to pay the call money, the company has the authority to forfeit the shares.

Share Capital Account

Securities Premium Reserve Account

Discount on Issue of Share Account

Calls in Advance Account

Correct Answer: B

Solution:

When shares are issued at a premium, the amount of premium is credited to the Securities Premium Reserve Account.

The shares are transferred to another shareholder.

The shares are forfeited.

The shares are issued at a discount.

The shares are converted into debentures.

Correct Answer: B

Solution:

When a shareholder fails to pay the amount due on shares, the shares can be forfeited.

The shares are automatically transferred to another shareholder.

The company can forfeit the shares.

The shareholder loses voting rights.

The company issues new shares to cover the unpaid amount.

Correct Answer: B

Solution:

If a shareholder fails to pay the call money, the company has the authority to forfeit the shares, which means cancelling the allotment and retaining the amount already paid.

Rs. 15,000

Rs. 25,000

Rs. 35,000

Rs. 50,000

Correct Answer: B

Solution:

The Calls in Arrears for the allotment is calculated as 500 shares x Rs. 50 (allotment money) = Rs. 25,000.

Share Capital Account

Securities Premium Reserve Account

Discount on Issue of Share Account

Capital Reserve Account

Correct Answer: B

Solution:

The premium amount is credited to the Securities Premium Reserve Account.

Rs. 12,000

Rs. 15,000

Rs. 9,000

Rs. 10,000

Correct Answer: A

Solution:

The final call was Rs. 30 per share. For 400 shares, the amount not received is 400 x Rs. 30 = Rs. 12,000.

Rs. 300

Rs. 600

Rs. 900

Rs. 1,200

Correct Answer: A

Solution:

The forfeiture amount for 150 shares is Rs. 8 * 150 = Rs. 1,200. The reissue price is Rs. 15 * 150 = Rs. 2,250. The gain on reissue is Rs. 2,250 - Rs. 1,200 = Rs. 1,050. The amount transferred to Capital Reserve is Rs. 300.

Calls in Advance

Calls in Arrears

Share Premium

Share Discount

Correct Answer: A

Solution:

Calls in Advance refers to the amount paid by shareholders before it is actually called up by the company.

Rs. 1,00,000

Rs. 50,000

Rs. 2,00,000

Rs. 60,000

Correct Answer: A

Solution:

The premium per share is Rs. 2. Therefore, for 50,000 shares, the total premium is 50,000 x 2 = Rs. 1,00,000, which is credited to the Securities Premium Reserve Account.

Share Capital Account

Securities Premium Reserve Account

Share Premium Account

Capital Reserve Account

Correct Answer: B

Solution:

When shares are issued at a premium, the premium amount is credited to the Securities Premium Reserve Account, as per the Companies Act, 2013.

Share Capital Account

Securities Premium Reserve Account

Share Application Account

Share Allotment Account

Correct Answer: B

Solution:

The amount received in excess of the nominal value of shares is credited to the 'Securities Premium Reserve Account'.

The shares are reissued at a higher price.

The shares are cancelled and the amount received is forfeited to the company.

The shares are transferred to another shareholder.

The shares are held in reserve for future issuance.

Correct Answer: B

Solution:

Forfeiture of shares means the cancellation of allotment due to breach of contract, and the amount already received on such shares is forfeited to the company.

Rs. 500,000

Rs. 525,000

Rs. 550,000

Rs. 600,000

Correct Answer: B

Solution:

The allotment amount includes the premium. The total amount due on allotment is Rs. 50 per share for 10,000 shares, including the premium of Rs. 5 per share. Therefore, the total amount received on allotment is 10,000 * Rs. 50 + 10,000 * Rs. 5 = Rs. 525,000.

Issuing shares at a discount

Cancellation of shares due to non-payment

Issuing shares at a premium

Returning application money

Correct Answer: B

Solution:

Forfeiture of shares refers to the cancellation of shares due to non-payment by the shareholder.

The part of the authorised capital which is issued by the company.

The amount of capital actually applied for by the prospective shareholders.

The maximum amount of share capital a company is authorised to issue.

The amount actually paid by the shareholders.

Correct Answer: C

Solution:

Nominal share capital is the maximum amount of share capital which a company is authorised to issue.

Issued Capital

Subscribed Capital

Paid-up Capital

Authorised Capital

Correct Answer: D

Solution:

Authorised Capital is the maximum amount of share capital that a company is authorized to issue according to its constitutional documents.

Share Capital Account

Securities Premium Reserve Account

Discount on Issue of Share Account

Capital Reserve Account

Correct Answer: B

Solution:

The excess amount is recorded in the Securities Premium Reserve Account.

Forfeiture of shares occurs when a shareholder fails to pay one or more installments on shares allotted to them.

Forfeiture of shares means the company returns the amount received to the shareholder.

Forfeiture of shares is not allowed under the Companies Act, 2013.

Forfeiture of shares results in the shareholder receiving additional shares.

Correct Answer: A

Solution:

Forfeiture of shares occurs when shareholders fail to pay one or more installments on shares allotted to them, leading to the cancellation of allotment and the amount already received being forfeited to the company.

Calls in Arrears

Calls in Advance

Share Premium

Share Discount

Correct Answer: B

Solution:

Any amount paid by a shareholder in excess of the amount due on allotment or call is known as 'Calls in Advance'.

Amount due on shares but not yet paid by shareholders.

Amount paid by shareholders in excess of the amount due on allotment or call.

Amount received from shareholders before it is actually called-up by the directors.

Amount forfeited due to non-payment by shareholders.

Correct Answer: C

Solution:

Calls in Advance is the amount received from shareholders before it is actually called-up by the directors.

Share Capital Account

Securities Premium Reserve Account

Profit and Loss Account

Share Forfeiture Account

Correct Answer: B

Solution:

When a company issues shares at a premium, the premium amount is credited to the Securities Premium Reserve Account, which is strictly regulated by law.

Rs. 6,00,000

Rs. 7,20,000

Rs. 8,00,000

Rs. 7,00,000

Correct Answer: B

Solution:

The company received applications for 24,000 shares at Rs. 30 per share. Therefore, the total amount received on application is 24,000 * Rs. 30 = Rs. 7,20,000.

It is managed by all shareholders collectively.

It is a natural person with a common seal.

It is an artificial person with a corporate legal entity.

It does not require registration under any act.

Correct Answer: C

Solution:

A joint stock company is an artificial person with a corporate legal entity distinct from its members, as per the Companies Act, 2013.

Under Subscription

Over Subscription

Calls in Arrears

Calls in Advance

Correct Answer: B

Solution:

Over Subscription occurs when a company receives more applications for shares than the number offered.

To record the amount of premium received

To record the unpaid amount on calls

To record the amount of shares forfeited

To record the amount of shares reissued

Correct Answer: B

Solution:

The Calls-in-Arrears Account is maintained to record the amount not received from shareholders on calls made by the company.

To manage the daily operations

To elect the Board of Directors

To audit the company's financial statements

To issue shares

Correct Answer: B

Solution:

Shareholders elect the Board of Directors to manage the company's affairs.

Rs. 100,000

Rs. 200,000

Rs. 120,000

Rs. 80,000

Correct Answer: A

Solution:

The premium per share is Rs. 2, and if all shares are subscribed and paid, the total premium collected is the number of shares multiplied by the premium per share. Assuming 50,000 shares are issued, the total premium is 50,000 * Rs. 2 = Rs. 100,000.

To write off preliminary expenses

To pay dividends

To issue fully paid bonus shares

To cover operating losses

Correct Answer: C

Solution:

According to the Companies Act, 2013, the Securities Premium Reserve can be used for specific purposes such as issuing fully paid bonus shares, writing off preliminary expenses, or providing for the premium payable on redemption of debentures or preference shares. It cannot be used to pay dividends or cover operating losses.

The discount is credited to the Share Capital Account.

The discount is debited to the Discount on Issue of Share Account.

The discount is added to the Securities Premium Reserve Account.

The discount is treated as a revenue loss for the company.

Correct Answer: B

Solution:

When shares are issued at a discount, the amount of discount is debited to the Discount on Issue of Share Account, which is considered a capital loss.

Credited to Share Capital Account

Credited to Securities Premium Reserve Account

Debited to Share Capital Account

Debited to Securities Premium Reserve Account

Correct Answer: B

Solution:

The premium received on the issue of shares is credited to the Securities Premium Reserve Account.

Application for shares

Allotment of shares

Calls on shares

Redemption of shares

Correct Answer: D

Solution:

Redemption of shares is not a stage in the issue of shares; it is related to the repayment of shares.

Rs. 50,000

Rs. 100,000

Rs. 500,000

Rs. 1,000,000

Correct Answer: A

Solution:

The premium per share is Rs. 5 (5% of Rs. 100), so the total premium amount for 10,000 shares is Rs. 50,000.

To authorize share transfers

To serve as the company's signature

To issue dividends

To approve financial statements

Correct Answer: B

Solution:

A company's common seal is used as its signature.

Equity Shares

Preference Shares

Sweat Equity Shares

Debentures

Correct Answer: C

Solution:

According to the Companies Act, 2013, only sweat equity shares can be issued at a discount.

Issue at Par

Issue at Discount

Issue at Premium

Issue at Face Value

Correct Answer: C

Solution:

When shares are issued at a price higher than their nominal value, it is called 'Issue at Premium'.

Issued Capital

Subscribed Capital

Authorised Capital

Paid-up Capital

Correct Answer: C

Solution:

Authorised Capital is the maximum amount of share capital which a company is authorized to issue.

Rs. 1,400

Rs. 2,000

Rs. 2,400

Rs. 1,000

Correct Answer: A

Solution:

The amount received before forfeiture is Rs. 9 per share (Rs. 10 - Rs. 3 + Rs. 2 premium). Therefore, the amount transferred to the Share Forfeiture Account is 200 shares x Rs. 7 (Rs. 9 - Rs. 2 premium not received) = Rs. 1,400.

To raise capital for the company

To increase the number of shareholders

To comply with legal requirements

To reduce company liabilities

Correct Answer: A

Solution:

Shares are issued by a company primarily to raise capital for its operations and growth.

Rs. 50,000

Rs. 60,000

Rs. 70,000

Rs. 80,000

Correct Answer: B

Solution:

The excess application money received for 10,000 shares (60,000 - 50,000) is Rs. 30,000 (10,000 shares x Rs. 3). This amount is adjusted towards the allotment account. Therefore, the correct answer is Rs. 60,000.

It is a natural person with unlimited liability.

It is an artificial person with a corporate legal entity distinct from its members.

It does not have a common seal.

It cannot raise capital through shares.

Correct Answer: B

Solution:

A joint stock company is an artificial person having a corporate legal entity distinct from its members (shareholders) and has a common seal used for its signature.

Share Premium

Share Forfeiture

Discount on Issue of Shares

Share Allotment

Correct Answer: C

Solution:

The 'Discount on Issue of Shares' is considered a capital loss for a company.

To manage the daily operations of the company

To represent the shareholders and manage the company's affairs

To issue shares to the public

To handle the company's financial accounts

Correct Answer: B

Solution:

The Board of Directors is elected by the shareholders to represent them and manage the company's affairs.

Debit Share Capital A/c Rs. 1,000; Credit Share Forfeiture A/c Rs. 800; Credit Securities Premium Reserve A/c Rs. 200

Debit Share Capital A/c Rs. 1,200; Credit Share Forfeiture A/c Rs. 1,000; Credit Securities Premium Reserve A/c Rs. 200

Debit Share Capital A/c Rs. 1,000; Credit Share Forfeiture A/c Rs. 1,000

Debit Share Capital A/c Rs. 1,200; Credit Share Forfeiture A/c Rs. 1,200

Correct Answer: B

Solution:

The shares were issued at a premium of 20%, so the total value is Rs. 12 per share. On forfeiture, the premium already received is credited to the Securities Premium Reserve A/c. Therefore, Rs. 1,200 is debited to Share Capital A/c, Rs. 1,000 is credited to Share Forfeiture A/c, and Rs. 200 is credited to Securities Premium Reserve A/c.

True or False

Correct Answer: True

Solution:

Over subscription is defined as receiving applications for more shares than the number offered for subscription.

Correct Answer: True

Solution:

Any amount paid by a shareholder in excess of the amount due on allotment or call is known as 'Calls in Advance' and is credited to a separate account.

Correct Answer: False

Solution:

When shares are issued at a premium, the amount of premium is credited to a separate account called the Securities Premium Reserve Account, not the Share Capital Account.

Correct Answer: True

Solution:

Forfeiture of shares refers to the cancellation of allotment due to a breach of contract, where the company treats the amount already received on such shares as forfeited.

Correct Answer: True

Solution:

The excerpts explain that when shares are issued at a premium, the premium amount is credited to a separate account called 'Securities Premium Reserve Account'.

Correct Answer: True

Solution:

When shares are issued at a premium, the premium amount is credited to the Securities Premium Reserve Account as per legal requirements.

Correct Answer: True

Solution:

The excerpts describe forfeiture of shares as the cancellation of allotment due to a breach of contract, such as non-payment of calls.

Correct Answer: True

Solution:

The issue of shares for cash must adhere to the legal procedure outlined in the Companies Act.

Correct Answer: False

Solution:

It is not mandatory for a company to maintain a separate Calls-in-Arrears Account, although it may choose to do so.

Correct Answer: False

Solution:

It is not mandatory for a company to maintain a separate Calls-in-Arrears Account.

Correct Answer: True

Solution:

A company is an artificial person with a corporate legal entity distinct from its members, as per the Companies Act, 2013.

Correct Answer: True

Solution:

The excerpts mention that shareholders elect a Board of Directors to manage the company's affairs as their representatives.

Correct Answer: True

Solution:

Forfeiture of shares happens when shareholders fail to pay the required installments, leading to the cancellation of their allotment.

Correct Answer: True

Solution:

When shares are issued at a premium, the amount of premium is credited to the Securities Premium Reserve Account, which is strictly regulated by law.

Correct Answer: True

Solution:

When shares are issued at a premium, the premium amount is credited to the Securities Premium Reserve Account.

Correct Answer: True

Solution:

A company has the authority to forfeit shares if shareholders do not pay the required installments.

Correct Answer: False

Solution:

Shares are generally issued for cash, which is more common than issuing shares for consideration other than cash.

Correct Answer: True

Solution:

When shares are issued at a premium, the premium amount is credited to the Securities Premium Reserve Account, as regulated by law.

Correct Answer: True

Solution:

According to the excerpts, a company is described as an artificial person having a corporate legal entity distinct from its members (shareholders).

Correct Answer: True

Solution:

According to the definition, a company is an artificial person having a corporate legal entity distinct from its members.

Correct Answer: False

Solution:

Shares cannot be issued at a discount without complying with legal provisions. Only sweat equity shares can be issued at a discount according to the Companies Act, 2013.

Correct Answer: False

Solution:

The excerpts state that shares can be issued at a discount only if the company complies with specific provisions laid down by law, and generally, only sweat equity shares can be issued at a discount.

Accounting for Share Capital

AI Learning Assistant

Summary

Summary of Accounting for Share Capital

Key Terms

Stages of Share Issue

Types of Shares

Accounting Treatments

Common Issues

Important Concepts

Learning Objectives

Learning Objectives

Detailed Notes

Accounting for Share Capital

1. Introduction

2. Features of a Company

3. Types of Companies

4. Share Capital

5. Key Terms

6. Accounting Treatment

7. Common Mistakes

8. Practice Questions

Exam Tips & Common Mistakes

Common Mistakes and Exam Tips

Common Pitfalls

Exam Tips

Practice & Assessment

Multiple Choice Questions

Q1.Which of the following is NOT a characteristic of a joint stock company?

Correct Answer: C

Q2.What happens when a company issues shares at a premium?

Correct Answer: A

Q3.In the context of share capital, what is the primary purpose of a company's Board of Directors?

Correct Answer: C

Q4.What is the meaning of 'over subscription' in the context of share issuance?

Correct Answer: B

Q5.What is the term used for the amount not received from shareholders on calls?

Correct Answer: B

Q6.What is the term used for the cancellation of shares due to non-payment by shareholders?

Correct Answer: B

Q7.What is the accounting treatment for the amount received on forfeited shares?

Correct Answer: C

Q8.If a company issues shares at a price lower than their nominal value, what is this called?

Correct Answer: C

Q9.Which account is credited when shares are forfeited due to non-payment?

Correct Answer: C

Q10.What happens if a shareholder fails to pay the call money?

Correct Answer: B

Q11.Which account is credited when shares are issued at a premium?

Correct Answer: B

Q12.What happens when a shareholder fails to pay the amount due on shares?

Correct Answer: B

Q13.What happens if a shareholder fails to pay the call money on shares?

Correct Answer: B

Q14.A company issued 30,000 equity shares of Rs. 100 each payable at Rs. 30 on application, Rs. 50 on allotment, and Rs. 20 on the first and final call. If a shareholder fails to pay the allotment money on 500 shares, what is the amount of Calls in Arrears recorded in the books?

Correct Answer: B

Q15.If a company issues shares at a premium, where is the premium amount recorded?

Correct Answer: B

Correct Answer: A

Q17.A company forfeited 150 shares of Rs. 10 each issued at a premium of Rs. 4 per share for non-payment of allotment money of Rs. 8 per share including premium. If these shares were reissued at Rs. 15 per share fully paid-up, what is the amount transferred to the Capital Reserve?

Correct Answer: A

Q18.What is the term used for the amount that shareholders pay in advance before it is actually called up by the company?

Correct Answer: A

Q19.A company issued 50,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share. If the shares are fully subscribed and all money is received, what is the total amount credited to the Securities Premium Reserve Account?

Correct Answer: A

Q20.A company issued shares at a premium. Which account is credited with the premium amount?

Correct Answer: B

Q21.What is the name of the account where the amount received in excess of the nominal value of shares is credited?

Correct Answer: B

Q22.What happens when a company forfeits shares?

Correct Answer: B

Q23.A company issued 10,000 shares of Rs. 100 each at a premium of 5%. The shares are payable Rs. 25 on application, Rs. 50 on allotment, and Rs. 30 on first and final call. What is the total amount received on allotment?

Correct Answer: B

Q24.In the context of share capital, what does the term 'forfeiture' mean?

Correct Answer: B

Q25.What is the nominal share capital of a company?

Correct Answer: C

Q26.What is the maximum amount of share capital that a company is authorized to issue called?

Correct Answer: D

Q27.If a company issues shares at a price higher than their nominal value, where is the excess amount recorded?