Which of the following statements about share capital is TRUE?

(A) A company's shares are generally transferable.

(B) Share application account is a personal account.

(C) The part of capital which is called up only on winding up of a company is called reserve capital.

(D) Paid up capital can exceed called up capital.

Choose the correct answer from the options given below:

Looking at each statement:

(A) A company's shares are generally transferable - TRUE

Transferability of shares is one of the fundamental characteristics of a company. Shares can be freely transferred from one person to another (though private companies may have certain restrictions).

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(B) Share application account is a personal account - TRUE

Share Application Account represents money received from applicants who apply for shares. Since it represents persons (applicants), it is classified as a personal account and follows the golden rule: "Debit the receiver, Credit the giver."

When application money is received:

Bank A/c Dr.

To Share Application A/c

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(C) The part of capital which is called up only on winding up of a company is called reserve capital - TRUE

Reserve capital is a portion of uncalled capital that can be called up only at the time of liquidation or winding up of the company. It is created by passing a special resolution and provides additional security to creditors.

$\text{Uncalled Capital = Reserve Capital + Uncalled Capital (can be called anytime)}$

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(D) Paid up capital can exceed called up capital - FALSE

Paid up capital can never exceed called up capital. The relationship is:

$\text{Paid Up Capital = Called Up Capital - Calls in Arrear}$

Paid up capital is always less than or equal to called up capital. It represents what has actually been received against what has been demanded.

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Statements (A), (B) and (C) are correct while (D) is incorrect.

Answer: Option 2