MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Disclosure of Share Capital

Which of the ...

Question

Which of the following feature(s) of preference shares are similar to those of equity shares?

A

Redeemability

No worries! We‘ve got your back. Try BYJU‘S free classes today!

B

No obligation to pay dividend

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

C

Voting rights

No worries! We‘ve got your back. Try BYJU‘S free classes today!

D

Change over assets

No worries! We‘ve got your back. Try BYJU‘S free classes today!

E

Both (B) and (C) above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B No obligation to pay dividend
Like in the case of equity shareholders there is no obligatory payment to the preference shareholders and the preference dividend is not tax deductible.
Hence, option (B) is the correct answer.

Suggest Corrections

thumbs-up

0

Similar questions

Q. Preference shares are called securities, as these shares have the features of equity shares and debentures.

Q. From the following details calculate the number of equity shares of Rs.

10

each to be issued in order to redeem the preference shares.

11 %

Redeemable preference shares of Rs.

10

=

150, 000

Security premium A/c

=

15, 000

General Reserve A/c

=

15, 000

Profit and loss A/c

=

35, 000

Redeemable preference shares are to be redeemed at

10 %

Q. S Ltd. had 9,000, 8% preference shares of Rs. 100 each, fully paid up. The company decided to redeem these preference shares at par by the issue of sufficient number of equity shares. How many equity shares are required to be issued if new equity shares are to be issued at Rs. 12 for a premium including Rs. 2?

Q. A company was registered with an authorised capital of ₹10,00,000 divided into 7,500 Equity Shares of ₹ 100 each and, 2,500 Preference Shares of ₹100 each. 1,000 Equity and 500; 9% Preference Shares were offered to public on the following terms

—

Equity Shares payable
₹10 on application, ₹40 on allotment and the balance in two calls of ₹ 25 each. Preference Shares are payable ₹ 25 on application , ₹ 25 on allotment and ₹50 on first and final call. All the shares were applied for and allotted . Amount due was duly received . Prepare Cash Book and pass necessary journal entries to record the above issue of shares and show how the Share Capital will appear in the Balance Sheet.

Q. A preference share which carry the right of participating in the surplus left after paying equity dividend is called.

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Understanding Balance Sheet

ACCOUNTANCY

Watch in App

explore_more_icon

Explore more

Disclosure of Share Capital

Standard XII Accountancy

Join BYJU'S Learning Program

CrossIcon