Match List I with List II
| List I | List II |
| A. Share forfeiture | I. Reserve Capital |
| B. Uncalled Capital | II. Pro-rata allotment |
| C. Over-subscription | III. Capital Reserve |
| D. Discount on the issue of shares | IV. Reissue of shares |
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- A-III, B-I, C-II, D-IV.
| List I | List II |
| A. Share forfeiture | III. Capital Reserve |
| B. Uncalled Capital | I. Reserve Capital |
| C. Over-subscription | II. Pro-rata allotment |
| D. Discount on the issue of shares | IV. Reissue of shares |
*Share forfeiture - Balance of share forfeiture account will be transferred to capital reserve.
*Uncalled Capital- A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company. Such uncalled amount is called ‘Reserve Capital’ of the company. It is available only for the creditors on winding up of the company.
* Over-subscription- There are instances when applications for more shares of a company are received than the number offered to the public for subscription. This usually happens in respect of shares issue of well-managed and financially strong companies and is said to be a case of ‘Over Subscription’. In such a condition, three alternatives are available to the directors to deal with the situation: (1) they can accept some applications in full and totally reject the others; (2) they can make a pro-rata allotment to all; and (3) they can adopt a combination of the above two alternatives which happens to be the most common course adopted in practice.
*Discount on the issue of shares- Discount can be given on re issue of share.