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Business Studies

Methods of Floatation

Alteration of...

Question

Alteration of shares of smaller amounts into shares of larger amount is called _________ of share capital.

A

surrender

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B

subdivision

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C

consolidation

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D

None of these

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Solution

The correct option is C consolidation
Share consolidation is a corporate action conducted by the company with the intention to reduce its number of shares trading on the stock exchange. It does so by reducing the number of shares held by its existing shareholders.

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Similar questions

Q. Alteration of shares of larger denominations into smaller denominations is called ________of shares.

Q. Conversion of shares of a smaller denomination into shares of a bigger denomination is called

Q. X Ltd. was formed with a capital of Rs 1,00,000 divided into shares of Rs 10 each. Out of these 2,000 shares were issued to the vendors as fully paid as purchased consideration. 6,500 shares was offered to the public and of these 6,000 share were applied for an allotted the directors called Rs 6 per share and received the entire amount except a call of Rs 2 per share on 500 share. The amount of issued capital is __________.

Q. At the time of forfeiture of shares which were originally issued at a discount, the accounting entry will be
I. A Debit Share capital account with the called-up value of shares forfeited.
II. A Credit Share forfeiture account with the amount received on forfeited shares.
III. A Credit Discount on issue of shares with the amount of discount allowed on forfeited shares,
IV. A Credit Calls-in-arrears with the amount due but not paid on forfeited shares.

Q. A company has issued

10, 000

R s . 20

each and amount has been demanded as under:
On application -

R s . 5

R s . 7

1 s t

R s . 6

2 n d

and Final Call -

R s . 2

A shareholder holding

400

shares paid only application money and his shares have been forfeited. On reissue of these shares @

R s . 16

per share, amount debited to shares forfeited account is _____________ .

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