Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

Match List-I with List-II.

List-I List-II
(A) Equity Share (I) Fixed Dividend
(B) Preference Share (II) No hold over Assets
(C) Secured Loan (III) Hold over Assets
(D) Unsecured Loan (IV) Voting Right

Choose the correct answer from the options given below :

Options:

(A)-(I), (B)-(II), (C)-(III), (D)-(IV)

(A)-(II), (B)-(I), (C)-(III), (D)-(IV)

(A)-(IV), (B)-(I), (C)-(III), (D)-(II)

(A)-(III), (B)-(I), (C)-(II), (D)-(IV)

Correct Answer:

(A)-(IV), (B)-(I), (C)-(III), (D)-(II)

Explanation:

The correct answer is option (3) : (A)-(IV), (B)-(I), (C)-(III), (D)-(II)

* Equity shares - Voting Rights. One of the fundamental rights that come with holding equity shares is the right to vote at company meetings, such as Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs). Each equity share typically carries one voting right, which means that shareholders have a say in the company's major decisions.

* Preference shares - Fixed dividend. When a company issues preference shares, it promises to pay a fixed rate of dividend to the preference shareholders. This rate is specified in the terms of the preference share issue. It is usually expressed as a percentage of the face value of the share. 

* Secured Loan - Hold over assets. A secured loan is backed by collateral, which is an asset or property that the borrower pledges to the lender as security for the loan. This collateral serves as a guarantee that the lender can seize and sell to recover their money if the borrower defaults on the loan. Common examples of secured loans include mortgages (secured by the home) and auto loans (secured by the vehicle).

* Unsecured Loan- No hold over assets. An unsecured loan does not require any collateral. These loans are granted based on the borrower's creditworthiness income, and repayment  ability. Credit cards, personal loans are examples of unsecured loans.