A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 13 - 14 of 50

Question 13

Edit

Question

MCQ▾

A smaller number of shares are allocated to each applicant according to the number of shares applied by him, which is called

Choices

Choice (4)
a.Oversubscription of shares
b.Pro-rata basis
c.Under-subscription of shares
d.Forfeiture of shares

Answer

b.

Explanation

Shares issued by well managed and financially strong Companies often get oversubscribed. Shares are said to be oversubscribed when the number of shares applied for is more than the number of shares offered to the public for subscription However, as the Company cannot allot shares more than that offered for subscription; the board of Directors will have to allot shares on Pro-rata basis. It means that a smaller number of shares are allotted to each applicant according to the number of shares applied by him.

Question 14

Edit

Question

MCQ▾

The assets that are ling term in nature and don does not have a physical existence but carry rights are:

Choices

Choice (4)
a.Investments
b.Intangible assets
c.Current assets
d.Fixed assets

Answer

b.

Explanation

Intangible assets are the long-term assets that do not possess physical existence but refers to the right having values. An intangible asset is not physical in nature. Examples of intangible assets are- Intellectual Property rights like patents copyright etc. , Goodwill, brand recognition, and are all intangible assets.

Choose Paper