Practice Test

Q1) Which of the following is false ? Show Answer

Q2) S ltd issued 2,000 10% preference shares of Rs.100 each at par ,which are redeemable at a premium of 10 % .For the purpose of redemption ,the company issued 1,500 equity shares of Rs.100 each at a premium of 20 % per share .At the time of redemption of reference shares ,the amount to be transferred by the company to the capital redemption reserve account Show Answer

Q3) During the year 2000-01,T ltd .issued 20,000 ,12% Preference shares of Rs.10.each at a premium of 5% ,which are redeemable after 4 years at par .During the year 2005-06,as the company did not have sufficient cash resources to redeem the preference shares, it issued 10,000,14% debenture of Rs.10 each at a premium of 10% .At the time of redemption of 12% preference shares, the amount to be transferred to the capital redemption reserve=? Show Answer

Q4) According to section 52 of the Companies Act, the amount in the securities premium account cannot be used for the purpose of Show Answer

Q5) Which of the following can be utilized for redemption of preference shares ? Show Answer

Q6) Which of the following can be transferred to the capital redemption reserve account ? Show Answer

Q7) A company cannot issue redeemable preference shares for a period exceeding Show Answer

Q8) Share premium cannot be used to Show Answer

Q9) Which of the following is false ? Show Answer

Q10) On September 4,2005,the company issued 12,000 7% Debenture having face value of Rs.100 each at a discount of 2.5%.On September 12,2005,the company issued 25,000 8% Preference shares of Rs.100 each. On September 29,2005,the company redeemed 30,000 6% Preference shares of Rs.100 each at a premium of 5% together with one month dividend thereon. Bank balance as on August 31,2005 was Rs.29,25,000.After effecting the above transaction the Bank, balance of on September 30,2005 =? Show Answer

Q11) O ltd had redeemed its 12% preference shares of Rs.2,00,000 at a premium of 4 % .For the purpose of redemption ,they .issued 1,98,072 worth of shares of Rs.20 each at a premium of 5 %.The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ? Show Answer

Q12) Preference shares amounting to Rs.2,00,000 are redeemed at a premium of 5% by issue of shares amounting to Rs.1,00,000 at a premium of 10%.The amount to be transferred to capital redemption reserve = ? Show Answer

Q13) Which of the following cannot be used for the purpose of creation of capital redemption reserve account Show Answer

Q14) which company can issue redeemable preference shares Show Answer

Q15) a company cannot issue Show Answer

Q16) A company cannot issue any preference shares which is redeemable after the expiry of a period of___years Show Answer

Q17) preference shares can be redeem only if these are Show Answer

Q18) preference shares can be redeem out of Show Answer

Q19) which does not form a part of divisible profit Show Answer

Q20) the premium ,if any payable on redemption must be provided for out of Show Answer

Q21) where redeemable preference shares are redeemed out of the divisible profits , an amount equivalents to the nominal value of the share so redeemed must be transferred out of divisible profits to Show Answer

Q22) A transfer to capital redemption reserve is required u/s 55 when preference shares are redeemed Show Answer

Q23) when preference shares are redmeed out of divisible profit ,which amount is transferred to capital redemption reserve u/s 55 : Show Answer

Q24) when preference shares are redmeed out of divisible profit ,a transfer to capital redemption reserve can be made out of: Show Answer

Q25) which of the following account can be transferred to capital redemption reserve account Show Answer

Q26) which of the following cannot be used for the purpose of creation of capital redemption reserve account ? Show Answer

Q27) the capital redemption reserve account may be applied by the company Show Answer

Q28) redemption of preference shares Show Answer

Q29) Issue of new shares u/s 55 Show Answer

Q30) which of the following statement is false ? Show Answer

Q31) which of the following statement is false ? Show Answer

Q32) 1,00,000 equity shares of Rs.10 each are issued at premium of 10% to redeem the preference shares ,the proceeds of a fresh issue u/s55 is Show Answer

Q33) to redeem 15% preference shares Rs.1,00,000 at 5% premium,Rs.10,000 , 12% debentures of Rs.100 each are issued at a discount of 10 % .the amount to be transferred to capital redemption reserve is Show Answer

Q34) X ltd decided to redeem 650 , 15% Red .pref.shares of Rs.100 each at a premium of 10% .it has a general reserve of Rs.75,000 & a securities premium of Rs.4,000 .if it is decided to redeem pref.shares out of divisible profits ,the amount required to be transferred to capital redemption reserve account Show Answer

Q35) X ltd decided to redeem 650 , 15% Red .pref.shares of Rs.100 each at a premium of 10% .it has a general reserve of Rs.75,000 & a securities premium of Rs.4,000 .it is decided to issue 650,15% debentures of Rs.100 each for the purpose of redemption pref.shares,the amount required to be transferred to capital redemption reserve account Show Answer

Q36) X ltd decided to redeem 650 , 15% Red .pref.shares of Rs.100 each at a premium of 10% .it has a general reserve of Rs.70,000 & a securities premium of Rs.4,000 .it is decided to issue 6500,equity shares of Rs.10 each at a premium of 5% for the purpose redemption pref.shares, the amount required to be transferred to capital redemption reserve account Show Answer

Q37) X ltd decided to redeem 650 , 15% Red .pref.shares of Rs.100 each at a premium of 10% .it has a general reserve of Rs.70,000 & a securities premium of Rs.4,000 .it is decided to issue 1,950,equity shares of Rs.10 each at a premium of 30 % for the purpose redemption pref.shares, the amount required to be transferred to capital redemption reserve account Show Answer

Q38) X ltd decided to redeem 650 , 15% Red .pref.shares of Rs.100 each at a premium of 10% .it has a general reserve of Rs.70,000 & a securities premium of Rs.4,000 .it is decided to issue 2000,equity shares of Rs.10 each at a premium of 25 % for the purpose redemption pref.shares, the amount required to be transferred to capital redemption reserve account Show Answer

Q39) X ltd decided to redeem 650 , 15% Red .pref.shares of Rs.100 each at a premium of 10% .it has a general reserve of Rs.70,000 & a securities premium of Rs.4,000 .it is decided to issue 2500,equity shares of Rs.10 each at par for the purpose redemption pref.shares, the amount required to be paid to pref. shareholders. Show Answer

Q40) X ltd decided to redeem 650 , 15% Red .pref.shares of Rs.100 each at a premium of 10% .it has a general reserve of Rs.45,500 & a securities premium of Rs.1,000 .if new equity shares are issued at 30% premium the minimum number of equity share of Rs.10 each to be issued for the purpose of redemption is Show Answer

Q41) X ltd decided to redeem 650 , 15% Red .pref.shares of Rs.100 each at a premium of 10% .it has a general reserve of Rs.45,500 & a securities premium of Rs.1,000 .if new equity shares are issued at 25% premium the minimum number of equity share of Rs.10 each to be issued for the purpose of redemption is Show Answer

Q42) A performance share is one which enjoys a - Show Answer

Q43) Which of the following statements is false? Show Answer

Q44) Unless otherwise stated, a Preference Share is always deemed to be - Show Answer

Q45) A performance Share which carries the right of sharing in the surplus left paying Equity Dividend is called - Show Answer

Q46) Which type of the following Shares have the right to receiver dividends unpaid in prior years, whenever earnings becomes adequate ? Show Answer

Q47) The Companies act, 2013, prohibits the issue of any Preference Share which is - Show Answer

Q48) Redeemable Preference Shares are those Shares on which Capital is to be paid back within the stipulated period of - Show Answer

Q49) How many 15% Preference Shares of Rs.100 each will be allotted to the Vendor, if the shares are issued at a premium of 25 %? Show Answer

Q50) Preference Shares can be redeemed - Show Answer

Q51) Redemption of preference Share Capital can be done - Show Answer

Q52) Which of the following cannot be utilized for redemption of preference Shares? Show Answer

Q53) On redemption of Preference Shares money cannot be arranged ( for payment to Shareholders) from - Show Answer

Q54) Which of the following condition should be satisfied to redeem the Preference Shares? Show Answer

Q55) Which of these is not on of the condition for redemption of Redemption Preference Share? Show Answer

Q56) If preference Shares are redeemed at premium such premium may be provided out is - Show Answer

Q57) O Ltd. has redeemed its 12% Preference Shares of Rs.2,00,000 at a premium of 4%. To meet the redemption, it has issued Rs.1,98,000 Shares of Rs.20 each at a premium of 5%. The balance outstanding to the credit of Share premium A/c after adjusting premium on redemption of preference Shares will be - Show Answer

Q58) A Company's Balance Sheet contains Rs.1.6 Lakhs fully paid 10% Redeemable Preference Shares and 1,00,000 as Reserve. It decides to redeem the Shares at 5% premium by maximum utilisation of earnings and from fresh issue of Shares.
If the issue is made at 20% premium, the minimum amount of fresh Equity issue will be - Show Answer

Q59) A Ltd provided the following information -
On 4th September 2008, the Company issued 12,000, 7% Debentures having a face value Rs.100 each at a discount of 2.5% . On 29th September, the Company redeemed 30,000, 6% Preference Shares of 100 each at a premium of 5 % together with one month dividend thereon. Bank balance as on 31th August 2008 was Rs..30,00,000. After effecting the above transactions, the Bank balance as on 31th September 2008 will be - Show Answer

Q60) To the extent Preference Shares have been redeemed out of profits, amount equal to the face value of preference Shares redeemed should be transferred to - Show Answer

Q61) The balance of Capital Redemption Reserve Account is a available for - Show Answer

Q62) Redeemable Preference Shares - Rs.50,000 redeemable at per. New issue of Shares - Rs.30,000 at per. Show Answer

Q63) Redeemable Preference Shares - Rs.50,000 redeemable at 5% premium. New issue of Shares - Rs.30,000 at par. Show Answer

Q64) Redeemable Preference Shares - Rs.50,000 redeemable at par. New issue Shares - Rs.30,000 at premium of 5%. Show Answer

Q65) Redeemable Preference Shares - Rs.50,000 redeemable at 5% premium. New issue of Shares - Rs.30,000 at premium of 10%. Show Answer

Q66) Preference Shares amounting to Rs.1,00,000 are redeemed at a premium of 5% by issue of Shares amounting to Rs.50,000 at a premium of 10% .The amount to be transferred to Capital redemption reserve account will be - Show Answer

Q67) Preference Shares amounting to Rs.2,50,000 are redeemed at a premium of 5%, by issue of Shares amounting to Rs.1,50,000 at a Premium of 10%. The amount to be transferred to Capital redemption reserve will be - Show Answer

Q68) Preference Shares of Rs.2 Lakhs are redeemed at par for which fresh Equity Shares of Rs.80,000 are issued a 10% premium.what amount should be transference to Capital Redemption Reserve? Show Answer

Q69) A Limited Company has to redeem Redeemable Preference Shares of the value Rs.1,00,000 for which the Company has issued 3,000 Equity Shares of Rs.10 each at a premium of 10% . The amount to be transferred to Capital redemption reserve account will be - Show Answer

Q70) Rich Ltd had 3,000, 12% Redeemable Preference Shares of Shares of Rs.100 each, fully paid up. The Company issued 25,000 Equity Shares of Rs.10 each at par and 1,000 14% full.The payment to Preference Shareholders was made in full. The amount to be transferred to Capital Redemption Reserve A/c is - Show Answer

Q71) Ankush Ltd had issued 10,000, 10% Redeemable Preference Shares of Rs.100 each, Fully paid up. The Company decided to redeem these Preference Shares at par, by issue of sufficient number of Equity Shares of Rs.10 each at a premium of Rs.2 per Share as fully paid up. The amount to be transferred to Capital Redemption Reserve Account will be - Show Answer

Q72) Light Ltd. has 10,000, 5% Preference Shares of Rs.10 each to be redeemed after 5 years. The Company forfeited 500 Preference Shares on which final call of Rs.2 has not been received after due notice and cancelled these Shares on account of redeemed. Remaining Shares were redeemed out of reserves of the Company. The amount to be credited to Capital redemption reserve will be - Show Answer

Q73) T Ltd issued 30,000, 12% Preference Shares of Rs.10 each at premium of 5% , which are Redeemable at par. The Company did not have sufficient cash resources to redeem the Preference Shares. Hence, it issued 20,000, 14% Debentures of Rs.10 each at a premium of 10%. The amount to be transferred to Capital Redemption Reserve A/c is - Show Answer

Q74) A Company wishes to redeem its redeem Preference Shares amounting to Rs.1,00,000 at a premium of 5% and for this purpose issued 5,000 Equity Shares of Rs.10 each at a premium of 5 %. The Company also has a balance of Rs.1,00,000 as General Reserve and Rs.50,000 in P and L A/c. The amount to be transferred to Capital Redemption Reserve A/c is - Show Answer

Q75) During the year 2008-2009, T Ltd issued 20,000, 12% Preference Shares of Rs.10 each at a premium of 5%, which are Redeemable after 4 years t par. During the year 2013-2014, as the Company did not have sufficient cash resources to redeem the Preference Shares, it issued 10,000, 14% debentures of Rs.10 each at a premium of 10%. At the time redemption of 12% Preference Shares, the amount to be transferred to Capital redemption reserve is - Show Answer

Q76) X Co. Ltd has to redeem 1,000 Preference Shares of Rs.100 each at 10% premium. It issues 5,000 Equity Shares of Rs.10 each at 10% premium. General Reserve amount transferred to Capital redemption reserve will be - Show Answer

Q77) Capital Redemption reserve amount is - Show Answer

Q78) No.of Bonus Shares issued is - Show Answer

Q79) Payment to Preference Shareholder for redemption amount to - Show Answer