Question Bank - Accountancy

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Match List I with List II:List IList II(A)Bonus shares(I)Invitation to existing shareholders to purchase additional new shares(B)Demat shares(II)Issue is made to existing members free of charge(C)Right issue(III)Share issues by a company to its employees/directors at a discount for providing know-how(D)Sweat equity share(IV)Shares in electronic formChoose the correct answer from the options given below:

A.
(A) - (II), (B) - (IV), (C) - (I), (D) - (III)
B.
(A) - (II), (B) - (I), (C) - (III), (D) - (IV)
C.
(A) - (IV), (B) - (III), (C) - (II), (D) - (I)
D.
(A) - (IV), (B) - (I), (C) - (II), (D) - (III)

Solution:

The correct answer is (A) - (II), (B) - (IV), (C) - (I), (D) - (III)The correct match is given below:List IList II(A)Bonus shares(II)Issue is made to existing members free of charge(B)Demat shares(IV)Shares in electronic form(C)Right issue(I)Invitation to existing shareholders to purchase additional new shares(D)Sweat equity share(III)Share issues by a company to its employees/directors at a discount for providing know-how Important Points Bonus Shares: Bonus shares are additional shares given to current shareholders without any additional cost, based upon the number of shares that a shareholder owns. These are the company's accumulated earnings which are not given out in the form of dividends, but are converted into free shares. Demat shares: Demat Shares are those shares which are not in the physical form but are held electronically. Right issue: An invitation to buy additional new shares of the company from current shareholders is known as a rights issue. Existing shareholders receive rights-based securities in this kind of offering. The rights allow the shareholder to buy more shares at a price below market value at a specified future period. Sweat Equity Shares: An invitation to buy additional new shares of the company from current shareholders is known as a rights issue. Existing shareholders receive rights-based securities in this kind of offering. The rights allow the shareholder to buy more shares at a price below market value at a specified future period.

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