Q.Write a short note on: Equity shares.

Equity (ordinary) shares are those which are not preference shares. Their dividend is not fixed, they carry voting rights, their holders are the true owners who bear the business risk, and they rank after preference shares for both dividend and repayment of capital.

This is a standard AP Inter 2nd-year (Commerce) company-accounts question, aligned with the NCERT/CBSE commerce curriculum.

Main features of equity shares:

• No fixed dividend — dividend varies with profits and is decided each year; it may be high in good years and nil in bad years.
• Voting rights — equity shareholders have the right to vote and so control the management of the company.
• Real owners / risk bearers — they are the ultimate owners and bear the greatest risk of the business. …