Class 12 Accountancy Important Chapter 5 Accounting for Share Capital

Class 12 Accountancy Important Chapter 5 Accounting for Share Capital Solutions English Medium As Per The New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 12 Accountancy Important Solutions in English Medium and select need one. AHSEC Class 12 Accountancy Additional Notes English Medium Download PDF. HS 2nd Year Accountancy Additional Solutions English Medium.

Class 12 Accountancy Important Chapter 5 Accounting for Share Capital

Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. ASSEB Class 12 Accountancy Additional Question Answer in English are part of All Subject Solutions. Here we have given HS 2nd Year Accountancy Important Notes English Medium for All Chapters, You can practice these here.

Accounting for Share Capital

Chapter: 5

Part B: Company Accounts and Analysis of Financial Statements

IMPORTANT QUESTION AND ANSWER

Answer The Following Question:

1. What is the main feature of a company as an artificial person?

Ans: A company, being an artificial person, has a separate legal identity distinct from its members. It can own property, enter into contracts, and sue or be sued in its own name.

2. What is authorised capital?

Ans: Authorised capital is the maximum amount of share capital a company can issue as stated in its Memorandum of Association. The company cannot raise more than this amount unless amended according to the Companies Act.

3. Explain the term ‘share capital’.

Ans: Share capital refers to the amount raised by a company through the issuance of shares to the public or private investors. It represents the equity stake in the company.

4. What is the liability of members in a company limited by shares?

Ans: In a company limited by shares, the liability of members is limited to the unpaid amount on the shares they hold. If they have paid the full value, they are not liable for any further debts.

5. What is perpetual succession in a company?

Ans: Perpetual succession means that a company continues to exist even if its members or shareholders change, or if a shareholder dies, becomes insane, or insolvent. The company’s existence is not affected by such changes.

6. What is a common seal in a company?

Ans: A common seal is an official signature used by a company to execute legal documents. It serves as the company’s authentication and is required on documents for them to be legally binding.

7. What is the difference between issued and subscribed capital?

Ans: Issued capital refers to the amount of capital that a company offers to the public, while subscribed capital is the part of the issued capital that has been subscribed by the shareholders.

8. What is the purpose of the Securities Premium Account?

Ans: The Securities Premium Account is created when shares are issued at a premium, and it is used to pay for the company’s expenses such as issuing bonus shares, writing off expenses, or paying premiums on redeemed securities.

9. What are preference shares?

Ans: Preference shares are shares that give holders preferential rights to receive dividends and repayment of capital over equity shareholders. They may be cumulative or non-cumulative, and redeemable or irredeemable.

10. What does ‘reserve capital’ refer to?

Ans: Reserve capital refers to the portion of uncalled capital that a company can call only in the event of winding up. It is kept aside for creditors when the company dissolves.

Fill in the Blanks: 

1. A company is an ________ person having a separate legal entity from its members.

Ans: Artificial.

2. The liability of the members in a company limited by shares is limited to the extent of the ________ of the shares held by them.

Ans: Unpaid amount.

3. The capital of a company, as mentioned in the Memorandum of association, is known as ________ capital.

Ans: Authorised.

4. A company can raise its capital in the form of ________ and _________.

Ans: Shares, Debentures.

5. The shares of a public company are freely _________.

Ans: Transferable.