Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:
The maximum capital beyond which a company is not allowed to raise funds by issue of shares is called as which capital?
Options:
Authorised Capital
Subscribed Capital
Issued Capital
Reserve Capital
Correct Answer:
Authorised Capital
Explanation:
The maximum amount beyond which a company is not allowed to raise funds by issue of shares is authorized capital. Authorized capital, also known as nominal capital, represents the securities that are designated for shareholders.