6. A company decides to issue shares to the promoters of the company for their services. What is the journal entry passed in this case?

a. Goodwill a/c Dr. To Share capital a/c

b. Share application account Dr.

To share capital a/c

c. Sundry asset a/c Dr.

To Promoters a/c

d. Profit and loss a/c Dr.

To Interest on calls in advance

7. Securities premium is shown on the liability side of the balance sheet under the head:

a. Fixed assets b. Current assets c. Current liabilities d. Reserves & Surplus

8. Under which head contingent liabilities must be shown:

a. Expenditure b. Current Liability c. As a footnote d. not shown

9. Companies avoid to issue shares at:

a. Par b. Premium c. Discount d. None of the above

10. What is the correct order of earnings distribution?

a. Debt-Equity-Preference b. Preference-Debt-Equity c. Equity-Debt-Preference d. Debt-Preference-Equity