Subject
BCOM
, BACHELOR OF COMMERCE
ASSIGNMENT
THIRD SEMESTER
BCOM 301 (CORPORATE ACCOUNTING)
Q.1 What is share capital? What are classes of shares?
Answer
Share capital is referred to as the capital that is raised by the company by issuing
shares to investors. Share capital comprise of capital that is generated from funds
generated by issuing of shares for cash or non-cash considerations.
Companies have a requirement of share capital for the purpose of financing their
operations. The share capital of the company will increase with the issuance of new
shares.
Share capital is of two types namely, equity share capital and preference share
capital. Equity share capital is generated by raising of funds from the investors and
preference share capital is obtained by the issuance of preference shares.
Classes of Shares
Authorised Capital
Issued Capital
Subscribed Capital
Called up Capital
Q.2 What is Difference between Reserves and Provisions?
Answer
Provisions are created to meet a specific liability and fulfill the requirement of the
law. Reserves are made to give strength to the financial position of the company. It is
created by debiting Profit and Loss Account. It is created by debiting Profit and Loss
Appropriation Account.
Q.3 Define Amalgamation. What are Types of Amalgamation
Answer
What Is an Amalgamation? An amalgamation is a combination of two or more
companies into a new entity. Amalgamation is distinct from a merger because
neither company involved survives as a legal entity. Instead, a completely new entity
is formed to house the combined assets and liabilities of both companies.
BCOM
, BACHELOR OF COMMERCE
ASSIGNMENT
THIRD SEMESTER
BCOM 301 (CORPORATE ACCOUNTING)
Q.1 What is share capital? What are classes of shares?
Answer
Share capital is referred to as the capital that is raised by the company by issuing
shares to investors. Share capital comprise of capital that is generated from funds
generated by issuing of shares for cash or non-cash considerations.
Companies have a requirement of share capital for the purpose of financing their
operations. The share capital of the company will increase with the issuance of new
shares.
Share capital is of two types namely, equity share capital and preference share
capital. Equity share capital is generated by raising of funds from the investors and
preference share capital is obtained by the issuance of preference shares.
Classes of Shares
Authorised Capital
Issued Capital
Subscribed Capital
Called up Capital
Q.2 What is Difference between Reserves and Provisions?
Answer
Provisions are created to meet a specific liability and fulfill the requirement of the
law. Reserves are made to give strength to the financial position of the company. It is
created by debiting Profit and Loss Account. It is created by debiting Profit and Loss
Appropriation Account.
Q.3 Define Amalgamation. What are Types of Amalgamation
Answer
What Is an Amalgamation? An amalgamation is a combination of two or more
companies into a new entity. Amalgamation is distinct from a merger because
neither company involved survives as a legal entity. Instead, a completely new entity
is formed to house the combined assets and liabilities of both companies.
