Q.Define share capital. State three purposes of securities premium. Write any six features of debentures. (1+3+6=10)

Showing the 12 most recent of 82 on this concept.

1. CBSE 2026Set MARCH1 markMCQ
   Q.Issued capital is a part of :

   (a) a) Reserve capital

   (b) b) Unissued capital

   (c) c) Authorised capital

   (d) d) Subscribed capital

   ›Reveal solutionSolution

   Issued capital is a portion of the authorised (registered) capital, so the answer is (c) Authorised capital.

   Share capital is classified as authorised -> issued -> subscribed -> called-up -> paid-up. Authorised capital is the maximum amount stated in the memorandum. The company need not issue all of it at once; the part it actually offers for public subscription is the issued capital, and the balance is unissued capital. So issued capital is always a part of the …

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2. CBSE 2026Set MARCH1 mark
   Q.State any one type of shares.

   ›Reveal solutionSolution

   One type of share is the Equity Share (the other being the Preference Share).

   Under the Companies Act, a company can issue two broad classes of shares:

   …

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3. CBSE 2026Set ANNUAL1 mark
   Q.Write the types of preference shares. (any four)

   ›Reveal solutionSolution

   Four types of preference shares are cumulative, non-cumulative, participating and non-participating.

   Preference shares carry a preferential right to dividend and to repayment of capital, and are classified according to the rights attached:

   • Cumulative vs Non-cumulative - whether unpaid dividends accumulate.
   • Participating vs Non-participating - whether they share in surplus profits beyond the fixed rate.
   • Convertible vs Non-convertible - whether they can be converted into equity shares. …

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4. CBSE 2026Set ANNUAL1 mark
   Q.State whether True or False: Shares are of two types.

   ›Reveal solutionSolution

   The statement is True.

   As per the Companies Act, 2013, a company's share capital is divided into two kinds of shares - equity shares and preference shares. So …

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5. CBSE 2026Set ANNUAL1 markMCQ
   Q.The capital with which a company is registered, is called:

   (a) Authorized Capital

   (b) Issued Capital

   (c) Subscribed Capital

   (d) Paid-up Capital

   (a) Authorized Capital

   (b) Issued Capital

   (c) Subscribed Capital

   (d) Paid-up Capital

   ›Reveal solutionSolution

   The capital with which a company is registered is its Authorized Capital.

   Share capital of a company is classified into several categories as it moves from registration to actual cash received:

   1. Authorized Capital — the maximum amount of share capital a company is legally allowed to raise, as stated in its Memorandum of Association (Capital Clause). This is the capital 'with which the company is registered.' It can only be increased by following the procedure laid down in the Companies Act, 2013 (special resolution + approval).
   2. Issued Capital — that part of the authorized capital which the company actually offers to the public/investors for subscription.
   3. Subscribed Capital — that part of the issued capital which has actually been subscribed/applied for and allotted to investors. …

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6. CBSE 2026Set ANNUAL1 markMCQ
   Q.What correct order of capitals is followed while preparing Notes to Account to find out the amount of share capital to be shown in Balance Sheet _______.

   (a) Issued capital, Authorised capital, Subscribed capital

   (b) Subscribed capital, Issued capital, Authorised capital

   (c) Authorised capital, Issued capital, Subscribed capital

   (d) Authorised capital, Subcribed capital, Issued capital

   (a) Issued capital, Authorised capital, Subscribed capital

   (b) Subscribed capital, Issued capital, Authorised capital

   (c) Authorised capital, Issued capital, Subscribed capital

   (d) Authorised capital, Subcribed capital, Issued capital

   ›Reveal solutionSolution

   The correct order is Authorised capital → Issued capital → Subscribed capital (Option C).

   Share capital is disclosed in the Notes to Accounts in a logical, descending sequence of scope:

   Step	Term	Meaning
   1	Authorised Capital	The maximum capital a company is permitted to raise, as stated in its Memorandum of Association.
   2	Issued Capital	The part of the authorised capital that the company actually offers for subscription to the public/promoters.
   3	Subscribed Capital	The part of the issued capital that has actually been taken up (applied for and allotted) by the public.
   …

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7. CBSE 2026Set ANNUAL1 markMCQ
   Q.The part of authorized capital which is offered to the public is called

   (a) subscribed capital

   (b) nominal capital

   (c) authorized capital

   (d) issued capital

   ›Reveal solutionSolution

   "Issued Capital" is the specific portion of a company's Authorised Capital that is actually offered to the public/investors for subscription.

   Share capital in company accounts moves through several well-defined stages:

   1. Authorised (Nominal/Registered) Capital — the maximum amount of capital a company is permitted to raise, as stated in its Memorandum of Association. This is a ceiling, not an actual issue.
   2. Issued Capital — the part of the authorised capital that the company actually offers for subscription to the public/investors. It can never exceed authorised capital.
   3. Subscribed Capital — the part of the issued capital that has actually been subscribed (applied and allotted) by the public.
   4. Called-up Capital — the part of subscribed capital that the company has demanded (called) from shareholders so far. …

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8. CBSE 2026Set ANNUAL1 markMCQ
   Q.The Part of Authorised capital offered by the company to the public for subscription is ............................... .

   (a) Subscribed Capital

   (b) Issued Capital

   (c) Called up Capital

   (d) Paid up Capital

   ›Reveal solutionSolution

   The part of Authorised Capital offered to the public for subscription is called Issued Capital.

   A company's share capital, as taught under "Accounting for Share Capital," has several layers, each a narrower slice of the one before:

   1. Authorised (Nominal/Registered) Capital — the maximum capital a company is permitted to raise, as stated in its Memorandum of Association.
   2. Issued Capital — the part of the Authorised Capital that the company actually offers to the public (or to specific persons) for subscription. It is always ≤ Authorised Capital.
   3. Subscribed Capital — the part of the Issued Capital that is actually applied for and allotted to applicants.
   4. Called-up Capital — the part of the Subscribed Capital that the company has demanded (called) from shareholders so far. …

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9. CBSE 2025Set MARCH1 markMCQ
   Q.Which of the following is not shown under the heading 'Share capital' in a balance sheet?

   (a) Authorised capital

   (b) Issued capital

   (c) Reserve capital

   (d) Subscribed capital

   ›Reveal solutionSolution

   Authorised, issued and subscribed capital are all shown under 'Share Capital'; reserve capital is not disclosed there. Correct option: (c).

   In GSEB Class-12 Commerce Accountancy (Share Capital):

   • Reserve capital = the portion of uncalled capital that a company resolves to call only at the time of winding up. …

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10. CBSE 2025Set ANNUAL1 markMCQ
    Q.Sweat equity shares are issued to (A) Employees (B) Directors (C) Both (A) and (B) (D) None of them

    ›Reveal solutionSolution

    Sweat equity shares are issued to employees and directors, so the answer is (C).

    Sweat equity shares are equity shares issued by a company to its employees or directors at a discount, or for consideration other than cash, in recognition of their know-how, intellectual property or value additions to the company.

    • They reward contribution, so both employees (A) and directors (B) can receive them. …

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11. CBSE 2025Set ANNUAL1 markMCQ
    Q.To whom is dividend given at a fixed rate in a company ? (A) Equity shareholders (B) Preference shareholders (C) Debenture holders (D) Promoters

    ›Reveal solutionSolution

    Dividend at a fixed rate is given to preference shareholders, so the answer is (B).

    Preference shares enjoy two preferential rights: a fixed rate of dividend paid before equity dividend, and priority in repayment of capital on winding up.

    • Equity shareholders (A) receive a fluctuating dividend decided each year out of remaining profits, not a fixed rate.
    • Debenture holders (C) receive interest, not dividend, and are creditors, not members. …

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12. CBSE 2025Set ANNUAL1 markMCQ
    Q.Which of the following is not a part of the capital structure of a company? (A) Share capital (B) Debt capital (C) General Reserve (D) Working capital.

    ›Reveal solutionSolution

    Working capital is not part of capital structure — option (D).

    Capital structure describes how a company finances itself through its long-term sources of funds. It typically includes:

    • Share capital (equity and preference),
    • Reserves and surplus (such as General Reserve), and
    • Debt capital (long-term borrowings/debentures). …

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