Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Shares

Question:

What is the other name of registered capital?

Options:

Subscribed Capital

Issued Capital

Nominal Capital

Reserve Capital

Correct Answer:

Nominal Capital

Explanation:

The correct answer is option 3- Nominal Capital.

Nominal Capital is the other name of registered capital. 

Authorised capital is the amount of share capital which a company is authorised to issue by its Memorandum of Association. The company cannot raise more than the amount of capital as specified in the Memorandum of Association. It is also called Nominal or Registered capital. The authorised capital can be increased or decreased as per the procedure laid down in the Companies Act. It should be noted that the company need not issue the entire authorised capital for public subscription at a time. Depending upon its requirement, it may issue share capital but in any case, it should not be more than the amount of authorised capital.