Podcast Beta
Questions and Answers
What occurs during Full Subscription of shares?
What is referred to as Under Subscription?
What happens during Over-Subscription of shares?
What does 'Shares at Par' mean?
Signup and view all the answers
What is the purpose of par value in shares?
Signup and view all the answers
When are shares said to be issued against a lump sum?
Signup and view all the answers
What is the system called when issued shares can be paid in various installments?
Signup and view all the answers
When a company issues shares at a lower cost than the nominal value, it is known as:
Signup and view all the answers
In the context of share issuance, what does 'premium' refer to?
Signup and view all the answers
What is the term for the total price payable for a specified number of shares at the time of application?
Signup and view all the answers
When issuing shares at a discount, what does the difference between the issue price and the nominal value represent?
Signup and view all the answers
What is the name for the total amount payable on shares along with the application when issued at a discount?
Signup and view all the answers
In the context of share issuance, what is meant by 'allotment'?
Signup and view all the answers
What do you call the process where shareholders make payments in multiple stages such as application, allotment, and calls?
Signup and view all the answers
Study Notes
Share Issuance
- During Full Subscription, the number of shares issued is equal to the number of shares applied for.
- Under Subscription occurs when the number of shares applied for is less than the number of shares issued.
- Over-Subscription occurs when the number of shares applied for is more than the number of shares issued.
Share Pricing
- Shares at Par means that the shares are issued at their nominal value or face value.
- The purpose of par value is to provide a minimum value for the shares.
Share Payment
- Shares are said to be issued against a lump sum when the full payment is made at the time of application.
- The system where shares can be paid for in various installments is called Calls.
Discounted and Premium Shares
- When a company issues shares at a lower cost than the nominal value, it is known as issuing shares at a discount.
- In the context of share issuance, premium refers to the excess amount paid over the nominal value.
- The difference between the issue price and the nominal value represents the discount when shares are issued at a discount.
Share Allotment and Payment
- The total price payable for a specified number of shares at the time of application is called the Application Money.
- The total amount payable on shares along with the application when issued at a discount is called Discount Premium.
- Allotment refers to the process of allocating shares to applicants.
- The process where shareholders make payments in multiple stages, such as application, allotment, and calls, is called Instalment System.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of accounting for the issuance of shares subscription with this quiz. Learn about different scenarios such as full subscription and under subscription and how they are handled in accounting.
