Page 256 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 10: Underwriting of Shares

Notes
Did u know? RRBs are specialized rural financial institutions for catering to the credit
requirements of the rural sector.

!

Caution RBI has also directed its own training centres and NABARD training centres to
conduct training programmes for RRBs staff in keeping with the requirements of the day.

Self Assessment

Select the best alternative:
13 Underwriting agreement in made to–

(a) Collect the capital easily.
(b) Get company registered.
(c) Enter into contracts with others.
(d) Get accounts audited.

14. Underwriting commission may be paid in the issue price of shares @–
(a) 10%
(b) 5%
(c) (c)

(d) 3%
15. Maximum limit of brokerage on all type of public issues is–
(a) 0.5%
(b) 2%

(c) 1.5%
(d) 3%
16. On the debit side of the Underwriting Account, entry is made for–
(a) Price of total issue.

(b) Value of shares held.
(c) Sale of shares.
(d) Expenses in respect of underwriting.
17. Which items are not shown in the credit side of underwriting account–

(a) Value of unsold shares.
(b) Sales proceeds of the shares.
(c) Commission of the underwriter.
(d) Expenses of the underwriter.

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