Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:

Where can I find the information about share capital, including the quantity of shares currently in circulation, as well as the associated rights, preferences, and limitations linked to each share class, along with any other pertinent details?

Options:

A statement of cash flows

A statement of financial position

Notes to Accounts

A statement of financial performance

Correct Answer:

Notes to Accounts

Explanation:

To ensure transparency regarding the identity of ultimate owners of the company, the following disclosures are required:
i) The company should disclose the aggregate number of shares in each class held by its holding company or its ultimate holding company, including shares held by subsidiaries or associates of the holding company or the ultimate holding company.
ii) The company should disclose the number of shares held by each shareholder who owns more than 5% of the total shares, specifying the number of shares held by each such shareholder.
iii) For the 5-year period immediately preceding the balance sheet date, the company should disclose the aggregate number and class of shares that have been: Allotted as fully paid up pursuant to contracts without any cash payment. Allotted as fully paid up by way of bonus shares. Bought back by the company. These disclosures contribute to enhancing the understanding of the ownership structure and financial activities of the company for the benefit of stakeholders.
Additionally, the presentation of shareholders' funds in the financial statements should provide a summary of significant items, while detailed information is presented in the Notes to Accounts.