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Shares issued as… (Class 12 Accountancy SQP 2024-25, Q12)

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AccountancyCBSE Class 12 · Sample paper, session 2024-25 · 1 mark · MCQ

CBSE Class 12 Accountancy sample paper 2024-25: question 12

From the official CBSE sample question paper for 2024-25, section A, question 12, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q12 · 1 mark · MCQAccounting for Share Capital

Shares issued as sweat equity can be
(I) Issued at par.
(ii) Issued at discount.
(iii) Issued at a premium.
Which of the following is correct?

  1. (A)Only (i) is correct.
  2. (B)Both (i) and (iii) are correct.
  3. (C)All are correct.
  4. (D)Only (ii) is correct.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Section 54 is an exception to the ban on issuing shares at a discount.

Hint 2

Sweat equity is issued for know-how, not cash.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Sweat equity shares are issued to employees or directors for know-how or value additions, under Section 54 of the Companies Act, 2013.

  2. They may be issued at par, at a premium or at a discount, so all three are correct. Option (C).

    1 mark

Answer: (C) All are correct.

Where the marks are

  • Sweat equity can be issued at par, premium or discount (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Accounting for Share Capital, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.