MCQ for CA Intermediate ACCOUNTING - Chapter 6 - ACCOUNTING FOR BONUS ISSUE AND RIGHT ISSUE

Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 1 - ACCOUNTING - Chapter 6: ACCOUNTING FOR BONUS ISSUE AND RIGHT ISSUE - For Practice relevant for May/November 23 Examinations

Q1.   Which of the following cannot be used for issue of bonus shares as per the Companies Act?

  1. Securities premium account
  2. Revaluation reserve
  3. Capital redemption reserve

Answer: 2

Q2. Which of the following statements is true with regard to declaring and issuing of Bonus Shares?  

  1. Assets are transferred from the company to the shareholders.
  2. A Bonus issue results in decrease in reserves and surplus.
  3. A Bonus issue is same as declaration of dividends.

Answer: 2

Q3.  Bonus issue is also known as

  1. Scrip issue
  2. Capitalisation issue
  3. Both (a) and (b).

Answer: 3

Q4.  ABC Co. Ltd resolved to issue bonus shares. Which of the following is not a pre-requisite for issuance of bonus shares? 

  1. Authorization in Articles of Association.  
  2. Timely Payment of statutory dues of employees such as PF, Gratuity etc.
  3. Sufficient balance in bank account of company

Answer: 3

Q5.  A company’s share’s face value is ₹ 10, book value is ₹ 20, Right issue price is ₹ 30 and Market price is ₹ 40, while recording the issue of right share, the securities premium will be credited with 

  1. ₹ 10
  2. ₹ 20
  3. ₹ 30

Answer: 2

Q6.  Earnings per share ______ after a bonus issue 

  1. Increases
  2. Decreases
  3. Remains constant.

Answer: 2

 

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