{"id":51185,"date":"2024-04-15T23:21:11","date_gmt":"2024-04-15T23:21:11","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=51185"},"modified":"2024-04-15T23:21:11","modified_gmt":"2024-04-15T23:21:11","slug":"a-company-redeemed-its-200000-preference-shares-for-this-it-issued-equity-share-capital-of-rs-150000-and-rs-100000-bonus-shares-were-also-issued-what-will-be-the-net-effect-of-these-tr","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/a-company-redeemed-its-200000-preference-shares-for-this-it-issued-equity-share-capital-of-rs-150000-and-rs-100000-bonus-shares-were-also-issued-what-will-be-the-net-effect-of-these-tr\/","title":{"rendered":"A company redeemed its 2,00,000\/- preference shares. For this it issued equity share capital of Rs. 1,50,000\/- and Rs. 1,00,000\/- bonus shares were also issued. What will be the net effect of these transactions on fund flow"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;No effect on fund flow&#8221; option2=&#8221;Increase of Rs. 50,000\/- in working capital&#8221; option3=&#8221;Decrease of Rs. 50,000\/- in working capital&#8221; option4=&#8221;None of the above&#8221; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>C. Decrease of Rs. 50,000\/- in working capital<\/strong><\/p>\n<p>Explanation:<\/p>\n<p>The company redeemed its 2,00,000\/- preference shares. For this it issued equity share capital of Rs. 1,50,000\/- and Rs. 1,00,000\/- bonus shares were also issued.<\/p>\n<p>The net effect of these transactions on fund flow is a decrease of Rs. 50,000\/- in working capital. This is because the company has redeemed its preference shares, which has resulted in a decrease in its liabilities. However, the company has also issued equity share capital and bonus shares, which has resulted in an increase in its assets. The net effect of these two transactions is a decrease in working capital.<\/p>\n<p>Here is a detailed explanation of each option:<\/p>\n<ul>\n<li>Option A: No effect on fund flow. This option is incorrect because the transactions have resulted in a decrease in working capital.<\/li>\n<li>Option B: Increase of Rs. 50,000\/- in working capital. This option is incorrect because the transactions have resulted in a decrease in working capital.<\/li>\n<li>Option C: Decrease of Rs. 50,000\/- in working capital. This option is correct because the transactions have resulted in a decrease in working capital.<\/li>\n<li>Option D: None of the above. This option is incorrect because the transactions have resulted in a decrease in working capital.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;No effect on fund flow&#8221; option2=&#8221;Increase of Rs. 50,000\/- in working capital&#8221; option3=&#8221;Decrease of Rs. 50,000\/- in working capital&#8221; option4=&#8221;None of the above&#8221; correct=&#8221;option3&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-51185","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A company redeemed its 2,00,000\/- preference shares. For this it issued equity share capital of Rs. 1,50,000\/- and Rs. 1,00,000\/- bonus shares were also issued. What will be the net effect of these transactions on fund flow<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/a-company-redeemed-its-200000-preference-shares-for-this-it-issued-equity-share-capital-of-rs-150000-and-rs-100000-bonus-shares-were-also-issued-what-will-be-the-net-effect-of-these-tr\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A company redeemed its 2,00,000\/- preference shares. For this it issued equity share capital of Rs. 1,50,000\/- and Rs. 1,00,000\/- bonus shares were also issued. What will be the net effect of these transactions on fund flow\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;No effect on fund flow&#8221; option2=&#8221;Increase of Rs. 50,000\/- in working capital&#8221; option3=&#8221;Decrease of Rs. 50,000\/- in working capital&#8221; option4=&#8221;None of the above&#8221; correct=&#8221;option3&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/a-company-redeemed-its-200000-preference-shares-for-this-it-issued-equity-share-capital-of-rs-150000-and-rs-100000-bonus-shares-were-also-issued-what-will-be-the-net-effect-of-these-tr\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T23:21:11+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"A company redeemed its 2,00,000\/- preference shares. For this it issued equity share capital of Rs. 1,50,000\/- and Rs. 1,00,000\/- bonus shares were also issued. What will be the net effect of these transactions on fund flow","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/a-company-redeemed-its-200000-preference-shares-for-this-it-issued-equity-share-capital-of-rs-150000-and-rs-100000-bonus-shares-were-also-issued-what-will-be-the-net-effect-of-these-tr\/","og_locale":"en_US","og_type":"article","og_title":"A company redeemed its 2,00,000\/- preference shares. For this it issued equity share capital of Rs. 1,50,000\/- and Rs. 1,00,000\/- bonus shares were also issued. What will be the net effect of these transactions on fund flow","og_description":"[amp_mcq option1=&#8221;No effect on fund flow&#8221; option2=&#8221;Increase of Rs. 50,000\/- in working capital&#8221; option3=&#8221;Decrease of Rs. 50,000\/- in working capital&#8221; option4=&#8221;None of the above&#8221; correct=&#8221;option3&#8243;]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/a-company-redeemed-its-200000-preference-shares-for-this-it-issued-equity-share-capital-of-rs-150000-and-rs-100000-bonus-shares-were-also-issued-what-will-be-the-net-effect-of-these-tr\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T23:21:11+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/a-company-redeemed-its-200000-preference-shares-for-this-it-issued-equity-share-capital-of-rs-150000-and-rs-100000-bonus-shares-were-also-issued-what-will-be-the-net-effect-of-these-tr\/","url":"https:\/\/exam.pscnotes.com\/mcq\/a-company-redeemed-its-200000-preference-shares-for-this-it-issued-equity-share-capital-of-rs-150000-and-rs-100000-bonus-shares-were-also-issued-what-will-be-the-net-effect-of-these-tr\/","name":"A company redeemed its 2,00,000\/- preference shares. 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