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CUET Accountancy 2025 PYQs31 May Shift 1. Free, no login required.

Company Accounts

past year questions, CUET Accountancy 2025 31 May Shift 1

Share Capital

past year questions, Company Accounts, CUET Accountancy 2025 31 May Shift 1

Easy

common

As a general rule, a company cannot ordinarily issue shares at ..................?

Solution

✅ Correct Option: 3

According to Section 53 of the Companies Act, 2013, a company is prohibited from issuing shares at a discount (i.e., below their face value) as a general rule.

Understanding the three ways of issuing shares:

At Par → Issue Price = Face Value (Allowed)

Example: ₹10 face value share issued at ₹10

At Premium → Issue Price > Face Value (Allowed)

Example: ₹10 face value share issued at ₹15

The excess ₹5 is credited to Securities Premium Account

At Discount → Issue Price < Face Value (Not Allowed Ordinarily)

Example: ₹10 face value share issued at ₹8

This represents a loss to the company and is prohibited

Why is discount prohibited?

Issuing shares at discount means selling shares below their nominal value, which reduces the capital base of the company. This can harm creditors who rely on the stated capital as a cushion for their claims. It also creates inequality among shareholders.

Exceptions where discount may be allowed:

  • Sweat equity shares to employees (with specific conditions)
  • Under orders of the National Company Law Tribunal (NCLT) in special cases

Therefore, Option 3 (Discount) is the correct answer as it represents what a company cannot ordinarily do.

Related questions:

2025: 4 June Shift 2

The director of Poly Plastic Limited resolved that 200 equity shares of Rs.100 each be forfeited for non-payment of the second and final call of Rs.30 per share. Out of these, 150 shares were re-issued at Rs.60 per share to Mohit. Journal entry for creating capital reserve will be:

2025: 15 May Shift 1

Minimum subscription is the minimum amount that, in the opinion of directors, must be raised to meet the needs of business operations of the company relating to:

(A) The price of any property purchased, or to be purchased, which has to be met wholly or partly out of the proceeds of issue;

(B) Preliminary expenses payable by the company and any commission payable in connection with the issue of shares;

(C) Working capital;

(D) Any other expenditure required for the usual conduct of business operations

Choose the correct answer from the options given below:

2025: 22 May Shift 1

Gupta Ltd. issued 1,000 equity shares of Rs. 100 each as fully paid-up, to the vendor, in consideration of the purchase of plant and machinery worth Rs. 1,00,000. Which of the following entry will be recorded in the company's journal for it?

2025: 29 May Shift 2

In a Journal Entry of Forfeiture of Shares, Securities Premium Account may be debited, when :-

2025: 29 May Shift 2

When Calls in Advance Account is adjusted _______ is credited and _______ is debited.

2026: 11 May Shift 1

The balance of Share Forfeiture account is shown as an addition to the total paid-up capital of the company. Under which head and title of the Balance Sheet it will be shown, until the forfeited shares are reissued?

A. 'Share Capital' under the title "Liabilities and Equity"

B. 'Reserve and Surplus' under the title "Liabilities and Equity"

C. 'Shareholders' Funds' under the title of "Equity and Liabilities"

D. 'Share Capital' under the title 'Equity and Liabilities'

Choose the correct answer from the options given below:

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