Which type of share gives the shareholder voting rights in a company?
a) Preference shares
b) Debentures
c) Equity shares
d) Treasury shares
The process of a company repurchasing its own shares from the market is called:
a) Stock split
b) Bonus issue
c) Buyback of shares
d) Initial public offering
A company issues shares at a price above their face value. This is called:
a) Issue at discount
b) Issue at par
c) Issue at premium
d) Bonus issue
Which account is credited when shares are issued at a premium?
a) Share Capital A/c
b) Share Premium A/c
c) Discount on Shares A/c
d) Retained Earnings A/c
Shares issued for consideration other than cash are recorded at:
a) Market value
b) Face value
c) Higher of market or face value
d) Lower of market or face value
Which of the following statements is TRUE about a rights issue?
a) It is available to new investors only
b) It is issued at a discount to existing shareholders
c) It is a type of share buyback
d) It is offered to debenture holders
The process of issuing additional shares to existing shareholders without any payment is called:
a) Rights issue
b) Bonus issue
c) Buyback
d) Private placement
Which of the following is NOT a reason for a company to buy back its shares?
a) To reduce outstanding shares
b) To increase earnings per share
c) To distribute excess cash
d) To increase the number of shareholders
What happens to shares bought back by the company?
a) They are reissued to the public
b) They are permanently canceled or held as treasury stock
c) They are sold to the government
d) They are converted into debentures
The book value of shares represents:
a) Market value of shares
b) Face value of shares
c) Net assets per share
d) Discounted value of shares
Which account is debited when shares are bought back at a premium?
a) General Reserve A/c
b) Share Capital A/c
c) Securities Premium A/c
d) Both (a) and (c)
Which statement is TRUE about a public offering of shares?
a) Only private companies can issue shares to the public
b) It involves selling shares to specific investors only
c) It is a method to raise funds from the general public
d) It is issued only at face value
Shares that do not carry voting rights are called:
a) Equity shares
b) Bonus shares
c) Preference shares
d) Treasury shares
If shares are issued at a discount, the discount amount is debited to:
a) Share Premium A/c
b) Discount on Issue of Shares A/c
c) Share Capital A/c
d) General Reserve A/c
A company must have sufficient _______ before buying back shares.
a) Market capitalization
b) Authorized share capital
c) Free reserves
d) Fixed assets
Which statement about bonus shares is FALSE?
a) They increase share capital
b) They require cash payment by shareholders
c) They reduce retained earnings
d) They do not affect the total assets of the company
Which account is credited when a company issues new shares for cash?
a) Cash A/c
b) Share Capital A/c
c) Securities Premium A/c
d) Retained Earnings A/c
The maximum price a company can pay for share buyback is based on:
a) Market value
b) Book value
c) Share capital and free reserves
d) Voting rights
Which of the following is a reason why companies issue bonus shares?
a) To reduce share capital
b) To reward shareholders without cash payout
c) To increase share buyback
d) To decrease ownership dilution
A company issuing shares through a private placement sells them to:
a) The public
b) Government agencies
c) A select group of investors
d) Existing shareholders only
The minimum price at which shares can be issued is called:
a) Market price
b) Face value
c) Par value
d) Both (b) and (c)
A share buyback helps in:
a) Increasing outstanding shares
b) Reducing earnings per share
c) Increasing market price of shares
d) Reducing reserves
What is the journal entry for issuing shares at par?
a) Bank A/c Dr.
To Share Capital A/c
b) Share Capital A/c Dr.
To Bank A/c
c) Bank A/c Dr.
To Securities Premium A/c
d) Bank A/c Dr.
To Share Premium A/c
To Share Capital A/c
