Accounting For Share Capital

Step 1: Meaning of revenue expenditure.
Revenue expenditure is recurring in nature, incurred for day-to-day operations, and its benefit is consumed within the accounting period.
Step 2: Analyse options.
- Purchase of furniture → Capital expenditure (asset creation).
- Payment of salaries → Regular expense, recurring → revenue expenditure.
- Construction of building → Capital expenditure (long-term asset).
- Purchase of machinery → Capital expenditure.
Step 3: Conclude.
Thus, payment of salaries is a revenue expenditure.
Final Answer:

Step 1: Types of shareholders.
- Equity shareholders: Receive dividend at fluctuating rate, depending on profits.
- Preference shareholders: Receive dividend at a fixed rate, before equity shareholders.
Step 2: Legal priority.
Preference dividend is paid first; only after that can equity shareholders receive dividend.
Step 3: Conclude.
Thus, dividend at a fixed rate is given to preference shareholders.
Final Answer:

Step 1: Called-up capital meaning.
Called-up capital is the portion of subscribed capital which the company has asked shareholders to pay.
Step 2: Paid-up capital meaning.
Paid-up capital is the actual amount received from shareholders out of the called-up capital.
Step 3: Adjustment.
If some shareholders fail to pay the called-up amount, it is called “Calls-in-arrear”. Therefore,
Step 4: Conclude.
Hence, Calls-in-arrear is deducted from called-up capital to arrive at paid-up capital.
Final Answer:

Step 1: Capital vs. revenue receipt.
- Revenue receipts are recurring, related to day-to-day activities, e.g., subscriptions, donations, interest.
- Capital receipts are non-recurring, related to specific purposes, e.g., building fund, entrance fees (in some cases).
Step 2: Analyse options.
- Subscription → Revenue receipt (recurring).
- Donation → General donations are revenue in nature.
- Building fund → Specifically received for construction of building → capital receipt.
- Interest on FD → Revenue receipt.
Step 3: Conclude.
Therefore, building fund is a capital receipt.
Final Answer: