# What is equity share? Explain the features of equity shares.

##### SOLUTION
• An equity share, normally known as the ordinary share is part ownership where each member is a fractional owner and initiates the maximum entrepreneurial liability related to a trading concern. These types of shareholders in any organization possess the right to vote.
• The main features of equity shares are:

1. They are permanent in nature

2. Equity shareholders are the actual owners of the company and they bear the highest risk.

3. Equity shares are transferable, i.e. ownership of equity shares can be transferred with or without consideration to other people.

4. Dividend payable to equity shareholders is an appropriation of profit.

5. Equity shareholders do not get a fixed rate of dividends.

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Subjective Medium Published on 18th 08, 2020
Questions 244531
Subjects 8
Chapters 125
Enrolled Students 199

#### Realted Questions

Q1 Single Correct Medium
The ending balance of owner's equity is Rs.21,000. During the year, the owner contributed Rs.6,000 and withdrew Rs.4000. If the firm had Rs.8,000 net income for the year what was the owner's equity at the beginning?
• A. Rs.23,000
• B. Rs.21,000
• C. Rs.19,000
• D. Rs.11,000

1 Verified Answer | Published on 18th 08, 2020

Q2 Single Correct Medium
Which of the following is not true?
• A. Loss on reissue of shares cannot be more than the gain on forfeiture of those shares
• B. Where all the forfeited shares are not reissued the share forfeited account will show as credit balance equal to gain on forfeiture of shares not yet issued
• C. When the shares are forfeited, securities premium is debited along with share capital where premium has not been received
• D. Where forfeited shares are issued at premium, the amount of such premium is credited to capital reserve account.

Asked in: Accountancy - Accounting for Share Capital

1 Verified Answer | Published on 18th 09, 2020

Q3 Single Correct Medium
When company issues shares at a premium the amount of premium may be received by the company:
• A. along with application money
• B. along with allotment only
• C. along with calls
• D. along with any of the (A), (B) or (C)

Asked in: Accountancy - Accounting for Share Capital

1 Verified Answer | Published on 18th 09, 2020

Q4 Subjective Medium
Write notes on(Any Three)
Constituents and concepts in Depository system.

1 Verified Answer | Published on 18th 08, 2020

Q5 Single Correct Medium
Use the following information for questions given ahead:
D Ltd. issued $2,00,000$ shares of $Rs. 100$ each at a premium of $Rs. 20$ per share payable as follows:
On application $Rs. 20$; On allotment $Rs. 50$ (including premium); On first call $Rs. 30$; On second and final call $Rs. 20$.
Applications were received for $3,00,000$ shares and pro-rata allotment was made to applications of $2,40,000$ shares. Money excess received on application was employed on account of sum due on allotment as part of share capital. A, to whom $4,000$ shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited and B, the holder of $6,000$ shares, failed to pay the two calls and his shares were forfeited after the second call. Of the forfeited shares, $8,000$ shares were reissued to C at a discount of $10$%, the whole of A's forfeited shares being reissued.
Amount received on application will be _______________.
• A. $Rs. 40,00,000$
• B. $Rs. 48,00,000$
• C. $Rs. 24,00,000$
• D. $Rs. 60,00,000$

Asked in: Accountancy - Accounting for Share Capital

1 Verified Answer | Published on 18th 09, 2020