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CA Foundation Company Accounts — practice questions

Explore 7 free Company Accounts questions in CA Foundation Accountancy. Open each question or exercise to read its content, reference answers and available explanation.

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Company Accounts questions and exercises with answers

Showing questions 1–7 of 7.

Shares can be issued at a price higher than face value. This is called issue atRead the answer and worked solution →If a company issues 10,000 shares of Rs 10 each at a premium of Rs 2, the amount of Securities Premium isRead the answer and worked solution →'Calls in arrears' refers toRead the answer and worked solution →'Calls in advance' representsRead the answer and worked solution →If a share of face value Rs 10 is issued at Rs 8, this isRead the answer and worked solution →Forfeiture of shares meansRead the answer and worked solution →On re-issue of forfeited shares, the maximum discount allowed isRead the answer and worked solution →

Worked practice questions

Shares can be issued at a price higher than face value. This is called issue at

  1. Par
  2. Discount
  3. Premium
  4. Bonus
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Correct answer: C. Premium

1. When the issue price exceeds the face value, the excess is share premium. 2. Premium is credited to the Securities Premium A/c. 3. Issue at par means face value; issue at discount is now restricted under the Companies Act 2013. 4. Hence (C) is correct. _Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 8 "Company Accounts - Issue of Shares", §8.1 ¶§8.1_

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If a company issues 10,000 shares of Rs 10 each at a premium of Rs 2, the amount of Securities Premium is

  1. Rs 20,000
  2. Rs 1,00,000
  3. Rs 1,20,000
  4. Rs 80,000
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Correct answer: A. Rs 20,000

1. Premium per share = Rs 2. 2. Total premium = 10,000 × Rs 2 = Rs 20,000. 3. Face value goes to Share Capital A/c; only the premium portion sits in Securities Premium A/c. 4. Hence (B) is correct. _Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 8 "Company Accounts - Issue of Shares", §8.1 ¶§8.1_

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'Calls in arrears' refers to

  1. Calls made by directors after share allotment
  2. Capital redeemed early
  3. Excess amount received from shareholders
  4. Amount due from shareholders but not yet paid
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Correct answer: D. Amount due from shareholders but not yet paid

1. When the company makes a call and a shareholder fails to pay by due date, the unpaid amount is shown as Calls in Arrears. 2. It is deducted from Called-Up Capital in the Balance Sheet to arrive at Paid-Up Capital. 3. Interest may be charged on arrears as per Articles. 4. Hence (B) is correct. _Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 8 "Company Accounts - Issue of Shares", §8.3 ¶§8.3_

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