These are ACCA F4 Global (CL/LW) Corporate and Business Law MCQs for Part-E of the Syllabus “Capital and the financing of companies”.

These multiple-choice questions (MCQs) are designed to help ACCA F4 Global students to better understand the exam format. We aim to instill in students the habit of practicing online for their CBE exams. By doing so, students can reduce exam stress and prepare more effectively.

Please note:

Students should not attempt these MCQs until they have studied the entire chapter.
All questions are compulsory, so please do not skip any.

We hope that these MCQs will be a valuable resource for students preparing for the ACCA F4 Global (CL/LW) exam.

INFORMATION ABOUT THESE CBE MCQs Test/Quiz

Course:	ACCA – Association of Chartered Certified Accountants
Fundamental Level:	Applied Skills
Subject:	Corporate and Business Law
Paper:	F4 Global – CL/LW
Chapter:	Share capital
Chapter Number:	15 of the Practice and Exam Kit
Syllabus Area:	E – “Capital and the financing of companies”
Questions Type:	CBE MCQs
Exam Section:	Section A

Syllabus Area

These Multiple Choice Questions (MCQs) cover the Syllabus Area Part E of the Syllabus; “Capital and the financing of companies” of ACCA F4 Global (CL/LW) Corporate and Business Law Module.

Time

These MCQs are not time-bound. Take your time and solve them without stress. Pay proper attention and focus. Do not rush or hesitate.

Result

Students will get their F4 Global CBE MCQs Test results after they finish the entire test. They will also be able to see the correct and incorrect answers, as well as explanations for the incorrect questions.

Types of Questions

MCQs: Choose one from the given options.
Multiple choice: Choose all those answers which seem correct/ or incorrect to you, as per the requirement of the question. Keep your eye on the wording “( select all those which are correct/ or incorrect)“.
Drop-down: Select from the list provided.
Type numbers: Type your answer in numbers as per the requirement of the question.

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F4 (GLO) - Chapter 15 - Part E - MCQs

Course: ACCA - Association of Chartered Certified Accountants
Subject: F4 (LW/CL) (GLOBAL) - Corporate And Business Law
Syllabus Area: E - Capital and the financing of companies
Chapter in Kit: 15 - Share capital
Exam Section: Section A
Questions type: MCQs
Time: No Time Limit

INSTRUCTIONS

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1 / 15

As a minimum, how many members must a public company have?

2 / 15

Which of the following statements regarding ordinary share capital is correct?

Dividends must be paid on ordinary share capital every financial year

Ordinary shares may or may not have voting rights attached

On liquidation of the company, ordinary shares entitle the shareholder to have their capital repaid ahead of other creditors

3 / 15

Which of the following statements regarding treasury shares is correct?

A company may exercise voting rights on its treasury shares

Only public limited companies may create treasury shares

Treasury shares may be reissued for cash without the usual issuing formalities

4 / 15

Which of the following describes the public offer method of allotting shares by a public company?

Members of the public subscribe for shares directly to the company

Shares are offered in a small number of large blocks to persons or institutions who have previously agreed to purchase the shares at a pre-determined price

An offer to the public to apply for shares based on information in a prospectus

5 / 15

Which of the following describes a rights issue?

The allotment of additional shares to existing shareholders in proportion to their holdings

An offer to debentureholders to purchase shares in the company

An offer to existing shareholders to purchase further shares in the company

6 / 15

Which of the following statements regarding issuing shares is correct?

Shares may be issued at a discount to their nominal value

Shares must be issued at their nominal value

Shares may be issued at a premium to their nominal value

7 / 15

Which of the following is true concerning issuing shares?

A company must receive full payment of the nominal value of a share when it is issued

A shareholder who did not pay the full nominal value of their share on issue, must pay any unpaid amount before selling the share

Where a shareholder did not pay the full nominal value of their share on issue, the debt transfers to the new shareholder if the share is sold

8 / 15

Which of the following describes a company's called-up share capital?

The maximum amount of share capital that a company can have in issue

The type, class, number and amount of shares issued and allotted to shareholders

The amount the company has required shareholders to pay on existing shares

The amount shareholders have paid on existing shares

9 / 15

Which of the following is correct concerning the market value of a company's shares?

Market value must be greater than nominal value

Market value must be lower than nominal value

Market value equals nominal value

Market value may be equal, greater or lower than nominal value

10 / 15

Which TWO of the following statements regarding preference shares are correct?

A company is compelled to pay dividends on preference shares every financial year
Preference shares do not normally entitle the shareholder to vote in company meetings
Preference shareholders usually have a right to have their capital returned in the event of a liquidation ahead of ordinary shareholders
In the event of a liquidation, preference shareholders have the right to share in any surplus assets ahead of the ordinary shareholders

2 and 3

2 and 4

1 and 2

3 and 4

11 / 15

With regard to share capital, which of the following constitutes a variation of class rights?

Changing the amount of dividend payable to a class of preference share

Issuing shares of the same class to allottees who are not already members of the class

Returning capital to preference shareholders

Subdividing shares of another class with the incidental effect of increasing the voting strength of that other class

12 / 15

Which of the following is true regarding the power of directors to allot shares?

Directors of private companies with one class of share have the power to allot shares unless restricted by the articles

Directors of all private companies have the power to allot shares unless restricted by the articles

Directors of private and public companies with one class of share have the power to allot shares unless restricted by the articles

Directors of all private and public companies have the power to allot shares unless restricted by the articles

13 / 15

Pre-emption rights are granted in which of the following situations?

A company proposes to allot ordinary shares wholly for cash

A company proposes to allot preference shares wholly for cash

A company proposes to allot preference shares

A company proposes to allot ordinary shares

14 / 15

Which of the following statements regarding payment for shares is correct?

A private company must have non-cash consideration independently valued before accepting it as payment for shares

Public company shares must always be paid for in cash

A private company may allot shares for inadequate consideration by accepting goods or services at an over-value

At the time of allotment, a public company must receive payment of at least 50% of the nominal value of the shares

15 / 15

Which TWO of the following are valid uses of a share premium account?

To issue fully paid shares under a bonus issue
To pay issue costs and expenses in respect of a new share issue
To issue fully paid shares under a rights issue
To purchase treasury shares

1 and 2

1 and 4

2 and 4

2 and 3

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F4 (CL – GLO) – Chapter 15 – PART E – CBE MCQs – ACCA