Accounting for Share Capital · Class 12 · CBSE · Commerce Accountancy
What is the maximum amount of capital that a company is authorized to raise by its Memorandum of Association?
Practice question from Accounting for Share Capital (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
easy · MCQ · Q-FFEBFE
What is the maximum amount of capital that a company is authorized to raise by its Memorandum of Association?
- A.Issued Capital
- B.Authorized CapitalCorrect answer
- C.Subscribed Capital
- D.Paid-up Capital
Solution
Authorized Capital (also known as Nominal or Registered capital) is the maximum amount of capital which a company is authorized to raise by issuing shares, as specified in its Memorandum of Association.
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