Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:
What is the difference between the procedure of issuing equity shares and preference shares of a company?
Options:
Preference shares are issued in one go
Preference shares have to be registered with SEBI
No difference
Equity shares have to be registered with SEBI
Correct Answer:
No difference
Explanation:
The procedure for accounting for the issue of both equity and preference shares is the same. To differentiate between the two the words ‘Equity’ and ‘Preference’ is prefixed to each and every instalment.