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CBSE Class 12 Accountancy Chapter 6 Accounting for Share Capital Worksheet with Answers

Share capital is the foundation of company finance, and CBSE Class 12 Accountancy Chapter 6 makes it essential for board exam success. This worksheet with answers covers everything from equity shares to preference shares, bonus shares, and rights issues — exactly as prescribed in your NCERT textbook. Whether you're preparing for your final exams or clearing doubts in real time, this resource helps you solve problems confidently. CBSETUTOR.ai, India's most-used AI tutor for CBSE, supports thousands of Class 12 students every day with step-by-step solutions and concept clarity — available 24/7 in both English and Hindi.

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Key takeaways

✓This worksheet mirrors CBSE board exam patterns for Accounting for Share Capital, covering issue, forfeiture, and reissue of shares.
✓Six sections progress from objective MCQs and fill-in-the-blanks to analytical long-answer and HOTS questions.
✓A case-study question tests application of share capital accounting in a realistic company scenario.
✓Complete answer key with step-by-step explanations helps self-assessment and clarifies NCERT concepts.
✓Moderate to challenging difficulty; allocate ninety minutes to simulate board exam pressure and build speed.
✓Perfect for weekend revision, pre-board practice, or homework assignments in CBSE Class 12 Accountancy.
✓CBSETUTOR.ai offers 24×7 AI-powered doubt solving for share capital entries and journal problems at ₹999/month with a 3-day free trial.

What Is Share Capital in Accounting?

Share capital represents the amount invested by shareholders in a company in exchange for ownership rights. In NCERT Class 12 Accountancy Chapter 6, share capital is divided into two main types: equity share capital (ordinary shares) and preference share capital (with fixed dividends and priority claims). Understanding this distinction is crucial because it affects how profits are distributed, voting rights are exercised, and company liabilities are managed. Share capital appears on the liability side of the Balance Sheet and forms part of shareholders' funds.

Equity Shares vs. Preference Shares: Key Differences

Equity shareholders hold ownership rights, vote in company decisions, and receive dividends after preference shareholders. Preference shareholders receive fixed dividends and have priority in capital repayment during liquidation, but typically have no voting rights. NCERT Chapter 6 emphasizes that equity shares are riskier but offer unlimited returns, while preference shares offer security with fixed returns. This distinction is tested frequently in CBSE board exams through journal entries and balance sheet preparations. Worksheet problems often require you to calculate share capital, dividends, and classify shares correctly.

Accounting Entries for Issue of Shares

When a company issues shares, the accounting treatment depends on whether shares are issued at par, at a premium, or at a discount. According to NCERT guidelines, shares at par value have no premium or discount — the debit to bank equals credit to share capital. Shares issued at premium require a separate credit to 'Share Capital Premium' account (which cannot be distributed as dividend). Discount on shares is rare but reduces the share capital credit. CBSE exams test your ability to prepare correct journal entries for all three scenarios and then show their impact on the Balance Sheet with proper classification.

Bonus Shares and Rights Issues Explained

Bonus shares are issued free to existing shareholders from reserves, without any cash inflow — only journal entries are made. When bonus shares are issued, the bonus amount is transferred from reserve to share capital, increasing the share capital account without increasing liabilities. Rights issues allow existing shareholders to buy additional shares at a discounted price, proportional to their holdings. NCERT Chapter 6 clarifies that both bonus and rights issues are capital restructuring tools, not profit distribution. Worksheet questions often combine these concepts with calculations of new share capital totals and reserve movements.

Forfeiture and Re-Issue of Shares

Share forfeiture occurs when a shareholder fails to pay calls on shares; the company cancels those shares and credits the amount received to Share Forfeiture Account. When forfeited shares are re-issued, the credit is split between Share Capital and Share Forfeiture Account (to record the profit on re-issue). NCERT Chapter 6 specifies that forfeiture must be authorized by the company's Articles of Association and approved by the board. This topic is complex but high-scoring in CBSE exams because it combines multiple accounts and requires careful journal entry preparation. Worksheets include step-by-step problems to build confidence.

Calls and Calls in Arrear: Accounting Treatment

Calls are installment payments shareholders must make after purchasing shares. If calls are not received by the due date, the amount becomes 'Calls in Arrear' — a receivable shown as an asset in the Balance Sheet (deducted from Share Capital) or as a separate line. The accounting treatment requires: debit Bank/Calls in Arrear, credit Share Capital or Calls Receivable. NCERT Chapter 6 emphasizes that Calls in Arrear must be separately disclosed, and if still unpaid after a certain period, shares are forfeited. This concept is tested through balance sheet problems where students must identify and classify calls correctly within the capital structure.

Why CBSETUTOR.ai Is India's Most-Used AI Tutor for CBSE Families

CBSETUTOR.ai is trusted by lakhs of Class 12 students and parents across India for CBSE Accountancy help. Our AI tutor provides instant, step-by-step solutions to share capital problems — just like the worksheets you're solving. Available 24/7 in both English and Hindi medium, CBSETUTOR.ai explains each journal entry, balance sheet adjustment, and calculation method in a way that matches your textbook and exam pattern. Thousands of CBSE families use CBSETUTOR.ai to clarify doubts in real time, practice with instant feedback, and build exam confidence — all personalized to your pace and learning style.

Common Worksheet Problem Patterns in Chapter 6

CBSE exams and worksheets typically test: (1) Issuing shares at par, premium, and discount; (2) Journal entries for bonus shares and rights issues; (3) Forfeiture and re-issue calculations; (4) Calls and Calls in Arrear accounting; (5) Balance sheet presentation of share capital and reserves. Most worksheet problems combine 2–3 of these concepts in a single scenario, requiring you to prepare journal entries and then extract figures for the Balance Sheet. Understanding the flow from journal entries to Balance Sheet presentation is key to scoring full marks. Practice solving problems in chronological order and always verify your Balance Sheet totals.

Balance Sheet Presentation of Share Capital

The Balance Sheet shows Share Capital and related accounts under 'Equity and Liabilities' on the liability side. NCERT Chapter 6 specifies the order: (1) Equity Share Capital; (2) Preference Share Capital; (3) Reserves and Surplus (including premium, bonus account, general reserve); (4) Less: Calls in Arrear (if any). The total of all these equals Shareholders' Funds. Each figure must be clearly labeled with the amount and cross-referenced to notes if required. Worksheet answers must show both the journal entries and the final Balance Sheet extract so you can practice both components tested in board exams. Proper presentation is worth marks.

Exam Tips and Strategy for Share Capital Questions

Read the scenario carefully to identify all share transactions (issue, bonus, forfeiture, calls). Prepare journal entries in chronological order, then calculate the final balance of each account. Always show workings for any calculations (premium, discount, forfeiture profit). Double-check that your Share Capital figure matches the worksheet answer before moving on. In exams, allocate 20–25 minutes for a 10-mark share capital question, leaving time to review. Practice this worksheet multiple times until you can solve it without hesitation — consistency builds exam confidence and helps you spot errors quickly.

Frequently asked questions

What is the difference between share capital and share premium in NCERT Chapter 6?+

Share capital is the par/face value of shares issued. Share premium is the excess amount received above par value when shares are issued at a premium. Share premium is credited to a separate account and cannot be distributed as dividend — it's used only for specific purposes like writing off preliminary expenses or issuing bonus shares.

How do I account for bonus shares in my worksheet answers?+

When bonus shares are issued, debit Reserves (Profit & Loss Account or General Reserve) and credit Share Capital with the bonus amount. No cash is involved. This increases share capital and decreases reserves, restructuring shareholders' funds without changing total equity.

Can I use CBSETUTOR.ai in Hindi medium for Chapter 6 problems?+

Yes, CBSETUTOR.ai supports Hindi medium CBSE students with instant solutions in Hindi for all Class 12 Accountancy chapters including Chapter 6. You can ask questions and receive step-by-step explanations in Hindi, helping you learn in your preferred language.

What are Calls in Arrear and how do they appear in the Balance Sheet?+

Calls in Arrear are unpaid installment amounts due from shareholders. In the Balance Sheet, they are shown as a deduction from Share Capital (or separately as an asset if recovered). For example: Equity Share Capital ₹10,00,000, Less: Calls in Arrear ₹50,000 = ₹9,50,000.

Is there a free trial or affordable plan for CBSETUTOR.ai to access share capital worksheets?+

Yes, CBSETUTOR.ai offers a free trial so you can explore Chapter 6 worksheets and solutions instantly. After the trial, affordable subscription plans are available for continuous 24/7 access to all CBSE Class 12 Accountancy content, with personalized problem solving.

How do I prepare journal entries for forfeiture and re-issue of shares?+

For forfeiture: Debit Share Capital and credit Share Forfeiture Account (loss) or Calls Receivable. For re-issue: Debit Bank, credit Share Capital (at par) and Share Forfeiture Account (profit). The profit on re-issue is the difference between re-issue price and par value.

What topics in Chapter 6 are most frequently tested in CBSE board exams?+

Most tested: issuing shares at premium/discount (journal entries + balance sheet), bonus shares, forfeiture and re-issue, and calls in arrear accounting. These topics appear as 10-mark questions requiring both calculations and proper balance sheet presentation. Practice worksheets focus heavily on these areas.

How can I verify if my worksheet answers are correct for share capital problems?+

Cross-check: (1) Journal entries balance (debit = credit); (2) T-account totals match balance sheet figures; (3) Share capital + premium + reserves = total shareholders' funds; (4) All accounts are classified correctly in the balance sheet under the right heads. Compare your balance sheet total with the given worksheet answer.

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