Question : Assertion (A): Shares cannot be allotted unless a minimum subscription is received. Reason (R): SEBI has prescribed that a company issuing shares to the public cannot allot shares unless it receives a subscription of 90% of the shares issued. In the context of the above two statements, which of the following is correct?
Option 1: Asseration A and Reason R are correct but the reason R is not correct explanation of Assertion A
Option 2: Both Assertion A and reason R are correct and Reason R is the correct explanation of Assertion A
Option 3: Only Assertion A is correct
Option 4: Assertion A is not correct but Reason R is correct
Correct Answer: Both Assertion A and reason R are correct and Reason R is the correct explanation of Assertion A
Solution : Answer = Both Assertion A and reason R are correct, and Reason R is the correct explanation of Assertion A
According to SEBi guidelines, a company cannot issue shares unless a minimum subscription (at least 90%) has been received.
Question : Assertion A :- Bonus shares are not shown in the Cash Flow Statement because cash is not transacted. Reason R :- Issue of bonus shares will not involve cash.
Option 1: Assertion A and reason R are correct and reason R is the correct explanation of assertion A
Option 2: Assertion A and reason R are correct but reason R is not the correct explanation of Assertion A
Option 3: Both assertion A and reason R are not correct
Option 4: Assertion A is correct but the reason R is not correct
Question : Assertion A: Premium Received on the issue of shares is credited to the Securities Premium Account.
Reason R: Securities premium is a reserve hence, may be credited to the General Reserve.
In the context of the above two statements, which of the following is correct?
Question : Assertions A: Called-up capital means share capital called by the company on the subscribed shares. Reason R: When a company issues shares on an amount that is receivable in installments, it calls upon the shareholders to pay the amount as called, thus it is the called-up capital. In the context of the above two statements, which of the following is correct?
Option 1: Asseration A and Reason R are correct but the Reason R is not correct explanation of Assertion A
Option 2: Both Assertion A and Reason R are correct and Reason R is the correct explanation of Assertion A
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