From Stock Exchanges to Dividend Policies:
Everything You Need to Know About Shares and
Debentures for Your Class 12 Accountancy
Curriculum
Q: What is a share in accounting terms?
A: A share is a unit of ownership in a company that represents a proportionate claim on the company's assets and earnings.
Q: What is a debenture?
A: A debenture is a long-term debt instrument issued by a company that promises to pay a fixed rate of interest to the debenture holder.
Q: What are the types of shares?
A: There are two types of shares: equity shares and preference shares. Equity shares represent ownership in the company and offer voting rights to the shareholder, while preference shares provide a fixed dividend and have priority over equity shares in case of liquidation.
Q: What is the difference between equity shares and preference shares?
A: Equity shares represent ownership in the company and offer voting rights to the shareholder, while preference shares provide a fixed dividend and have priority over equity shares in case of liquidation.
Q: What is share capital?
A: Share capital is the amount of money that a company raises by issuing shares to investors.
Q: How is share capital calculated?
A: Share capital is calculated by multiplying the number of shares issued by the face value of each share.
Q: What is authorized capital?
A: Authorized capital is the maximum amount of share capital that a company is authorized to issue according to its memorandum of association.
Q: What is issued capital?
A: Issued capital is the portion of authorized capital that a company has actually issued to investors.
Q: What is subscribed capital?
A: Subscribed capital is the portion of issued capital that has been subscribed to by investors.
Q: What is called up capital?
A: Called-up capital is the portion of subscribed capital that has been called up for payment by the company.
Q: What is paid-up capital?
A: Paid-up capital is the portion of called-up capital that has been paid by the shareholders.
Q: What is the difference between shares and debentures?
A: Shares represent ownership in the company and offer voting rights to the shareholder, while debentures are long-term debt instruments that provide a fixed rate of interest to the debenture holder.
Q: How are debentures classified?
A: Debentures can be classified as secured or unsecured, convertible or non-convertible, and redeemable or non-redeemable.
Q: What is a bond?
A: A bond is a debt instrument issued by a company or government that promises to pay a fixed rate of interest to the bondholder.
Q: What is a dividend?
A: A dividend is a portion of a company's profits that are distributed to its shareholders as a return on their investment.
Q: What is dividend yield?
A: Dividend yield is the ratio of annual dividends per share to the current market price of the share.
Q: What are bonus shares?
A: Bonus shares are additional shares that a company issues to its existing shareholders as a form of a dividend.
Q: What is the difference between a stock and a share?
A: Stock and share are often used interchangeably, but a stock refers to the overall ownership of a company, while a share is a unit of ownership in the company.
Q: What is a rights issue?
A: A rights issue is a method of raising capital by issuing new shares to existing shareholders at a discounted price.
Q: What is a buyback of shares?
A: A buyback of shares is when a company purchases its own shares from the open market, reducing the number of outstanding shares and increasing the value of the remaining shares.
Q: What is a debenture trustee?
A: A debenture trustee is a person or institution appointed to act as a custodian of the debenture holders' interests and to ensure that the company fulfills its obligations to the debenture holders.
Q: What is a debenture redemption reserve?
A: A debenture redemption reserve is a fund created by a company to ensure that it has sufficient funds to redeem its debentures when they mature.
Q: What is a debenture issue?
A: A debenture issue is the process of issuing debentures to raise funds for a company.
Q: What is a convertible debenture?
A: A convertible debenture is a type of debenture that can be converted into equity shares of the company at a predetermined price and time.
Q: What is a non-convertible debenture?
A: A non-convertible debenture is a type of debenture that cannot be converted into equity shares of the company.
Q: What is a redeemable debenture?
A: A redeemable debenture is a type of debenture that the company is obligated to redeem or repay at a predetermined time or date.
Q: What is an irredeemable debenture?
A: An irredeemable debenture is a type of debenture that does not have a maturity date and is not redeemable by the company.
Q: What is a debenture interest?
A: Debenture interest is the fixed rate of interest that the company pays to the debenture holders periodically.
Q: What is a debenture issue price?
A: A debenture issue price is the price at which the debentures are issued to the investors.
Q: What is a premium on shares?
A: A premium on shares is the amount by which the issue price of a share exceeds its face value.
Q: What is a discount on shares?
A: A discount on shares is the amount by which the issue price of a share is lower than its face value.
Q: What is a sweat equity share?
A: A sweat equity share is a share issued by a company to its employees or directors as a form of compensation for their contribution to the growth and development of the company.
Q: What is a shareholder?
A: A shareholder is a person or institution that owns shares in a company and is entitled to receive dividends and vote on important matters affecting the company.
Q: What is a shareholder agreement?
A: A shareholder agreement is a legal agreement between the shareholders of a company that defines their rights, obligations, and responsibilities.
Q: What is a proxy?
A: A proxy is a person who is authorized to vote on behalf of another person or institution, usually a shareholder.
Q: What is a stock exchange?
A: A stock exchange is a marketplace where stocks, bonds, and other securities are bought and sold.
Q: What is a stockbroker?
A: A stockbroker is a licensed professional who buys and sells securities on behalf of their clients.
Q: What is a stock index?
A: A stock index is a statistical measure of the performance of a group of stocks that are representative of a particular market or sector.
Q: What is insider trading?
A: Insider trading is the illegal practice of buying or selling securities based on material nonpublic information.
Q: What is a prospectus?
A: A prospectus is a legal document that provides detailed information about a company's business, financial performance, and securities offering to potential investors.
Q: What is a shareholder register?
A: A shareholder register is a record of all the shareholders of a company and their shareholdings.
Q: What is a dividend policy?
A: A dividend policy is a company's plan for distributing profits to its shareholders in the form of dividends.
Q: What is a rights entitlement?
A: A rights entitlement is the number of shares that a shareholder is entitled to purchase in a rights issue, based on their current shareholding.
Q: What is a bonus issue?
A: A bonus issue is when a company issues additional shares to its existing shareholders for free, in proportion to their current shareholding.
Q: What is a call option?
A: A call option is a financial contract that gives the holder the right, but not the obligation, to buy a specific asset at a predetermined price within a certain time period.
Q: What is a put option?
A: A put option is a financial contract that gives the holder the right, but not the obligation, to sell a specific asset at a predetermined price within a certain time period.
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