Class 12 Accountancy — Chapter 1: Accounting for Share Capital

Chapter 1: Accounting for Share Capital is a chapter in Class 12 Accountancy (Part 2), part of the CBSE NCERT curriculum followed by over 25 million students across India. This chapter covers 6 topics including Nature and Features of a Company, Kinds of Companies, Categories of Share Capital. BrainWeave provides free AI-powered explanations — by voice or text, in Hindi or English — with no signup required.

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What you'll learn

▸Nature and Features of a Company

Separate Legal EntityLimited LiabilityPerpetual SuccessionCommon SealTransferability of Shares
▸Kinds of Companies

Public CompanyPrivate CompanyOne Person Company (OPC)Limited by SharesLimited by Guarantee
▸Categories of Share CapitalCore concept

Authorised CapitalIssued CapitalSubscribed CapitalCalled-up CapitalPaid-up Capital
▸Accounting for Issue of SharesCore concept

Issue at ParSecurities PremiumShare ApplicationShare AllotmentShare Capital Account
▸Oversubscription of SharesCore concept

OversubscriptionPro-rata AllotmentCalls-in-AdvanceRefundAllotment Money
▸Forfeiture and Reissue of SharesCore concept

Forfeiture of SharesReissue of SharesShare Forfeited AccountCapital ReserveCalls-in-Arrears

Chapter Summary

Understand the fundamental characteristics of a joint stock company as an artificial legal person, including concepts like separate legal entity, limited liability, perpetual succession, and common seal.

Differentiate between various types of companies based on member liability (Limited by Shares, Limited by Guarantee, Unlimited) and the number of members (Public, Private, One Person Company).

Explain the classification and hierarchy of a company's share capital, including Authorised, Issued, Subscribed, Called-up, and Paid-up capital, and how they relate to each other.

Master the journal entries and accounting procedures for issuing shares at par and at a premium. This includes handling application, allotment, and various call stages.

Understand the concept of oversubscription, where applications received exceed the shares offered, and learn the accounting treatment for alternatives like rejection of excess applications or pro-rata allotment.

Learn the accounting treatment for forfeiture of shares due to non-payment of calls. This includes passing journal entries for forfeiture, reissuing the forfeited shares, and transferring the balance in the Share Forfeited Account to the Capital Reserve.

Practice Questions from this Chapter

Tap "Get Solution" on any question to ask our AI tutor.

Explain "separate legal entity." Get Solution →
Describe shares simply. Get Solution →
Why do companies need capital? Get Solution →
According to the text, the affairs of a company in India are governed by the provisions of which act? Get Solution →
What is the feature of a company that allows it to exist irrespective of changes in its membership? Get Solution →
The capital amount which a company is authorized to issue by its Memorandum of Association is known as what? Get Solution →
What acts as the official signature of a company since it is an artificial person? Get Solution →
In a company limited by shares, the liability of a member is limited to what? Get Solution →

Did you know?

💡 The very first companies were created to fund dangerous overseas trading expeditions.
💡 Some companies are legally considered "persons" but cannot eat or sleep.
💡 The oldest continuously operating company in the world is over 1400 years old.
💡 Buying a single share of a company means you own a tiny part of it.
💡 Many early companies had special seals, like a unique fingerprint, for official papers.

Frequently Asked Questions

How many topics are covered in this chapter?

This chapter covers 6 key topics: Nature and Features of a Company, Kinds of Companies, Categories of Share Capital, Accounting for Issue of Shares, Oversubscription of Shares, and more. The BrainWeave AI tutor explains each one with examples.

Is Chapter 1: Accounting for Share Capital important for board exams?

Yes — Class 12 is a CBSE board exam year, and every NCERT chapter is part of the syllabus. Use BrainWeave's AI tutor to master this chapter, then practice with the auto-generated quizzes and mind maps.

Can I get NCERT solutions for this chapter in Hindi?

Yes. BrainWeave's AI tutor supports Hindi, English, and Hinglish for both voice and text chat. Just ask your question in your preferred language.

Is BrainWeave free for Class 12 - Commerce?

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Related Chapters

Chapter 2: Issue and Redemption of Debentures

Chapter 5: Accounting Ratios

Chapter 6: Cash Flow Statement

Chapter 4: Analysis of Financial Statements

Chapter 3: Financial Statements of a Company

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