Question

Match List-I with List-II.

List-I	List-II
(A) Nominal Capital	(I) Offered to the public
(B) Reserve Capital	(II) Called up capital minus calls in arrears
(C) Paid up Capital	(III) Memorandum of Association
(D) Issued Capital	(IV) Called only at the time of winding up

• A. (A)-(I), (B) - (IV), (C) - (III), (D) - (II)
• B. (A)-(I), (B) - (III), (C) - (II), (D) - (IV)
• C. (A)-(III), (B) - (II), (C) - (IV), (D) - (I)
• D. (A)-(III), (B) - (IV), (C) - (I), (D) - (II)

Answer 1

The Correct Option is D

To solve the problem of matching the items in List-I with List-II, we must first understand the concepts of each capital type typically mentioned in accountancy:

• Nominal Capital: It is also known as authorized capital or registered capital. It represents the maximum amount of capital a company is authorized by its memorandum of association to issue to shareholders. Hence, it relates to the Memorandum of Association.
• Reserve Capital: This is part of the subscribed capital which the company resolves, by special resolution, not to call until the time of winding up of the company. Therefore, it is called only at the time of winding up.
• Paid up Capital: This refers to the amount of money the company has received from shareholders in exchange for shares of stock. It is generally the capital that has been subscribed and paid. So, this capital has been offered to the public.
• Issued Capital: This refers to the part of nominal capital that has been issued for subscription. It is often called up capital minus any calls in arrears.

Now, let's match each type with its description:

• (A) Nominal Capital — (III) Memorandum of Association
• (B) Reserve Capital — (IV) Called only at the time of winding up
• (C) Paid up Capital — (I) Offered to the public
• (D) Issued Capital — (II) Called up capital minus calls in arrears

Thus, the correct matching in the given options is: (A)-(III), (B)-(IV), (C)-(I), (D)-(II)

Answer 2

Let's match each term with the correct explanation based on the nature of capital in a company:

• Nominal Capital (A):
  Nominal capital, also known as authorized capital, is the amount of capital a company is authorized to raise according to the Memorandum of Association. This is the maximum capital that the company can raise.
  Therefore, (A) matches with (III) Memorandum of Association.
• Reserve Capital (B):
  Reserve capital refers to that portion of issued capital which is not callable by the company except when the company is being wound up. It is only called up during winding up.
  Hence, (B) matches with (IV) Called only at the time of winding up.
• Paid-up Capital (C):
  Paid-up capital is the portion of the issued capital that has been paid by the shareholders, excluding calls in arrears.
  Therefore, (C) matches with (I) Offered to the public.
• Issued Capital (D):
  Issued capital refers to the amount of capital that the company has actually raised from shareholders, which is called-up capital minus calls in arrears. Therefore, (D) matches with (II) Called up capital minus calls in arrears.

Thus, the correct matching is (D): (A)-(III), (B)-(IV), (C)-(I), (D)-(II).