1. _ _ _ is the division of company’s ownership into numerous equal parts.

(a) dividend (b) interest (c) shares (d) premium

2. One of these is a function a of capital market.
(a) new shares (b) financial institution (c) existing shares (d) capital formation
3. capital market is divided into two segments namely _ _ _ and _ _ _
(a) primary and secondary (b) big and small (c) first and last (d) little and large
4. _ _ _ is a market in which financial securities are bought and sold.
(a) loan market (b) singa market (c) shares market (d)capital market
5. Components of financial system includes all the following except _ _ _
(a) financial market (b) financial information (c) financial institution (d) financial services
6. _ _ _ are the intermediaries who facilitate smooth functioning of the financial system
investors and borrowers meet.
(a) financial institution (b) capital market (c) government (d) general public
7. _ _ _ is the segment capital market that provides the vehicle for raising fresh loan by
government and corporate bodies.
(a) Alaba market (b) primary market (c) tertiary market (d) secondary market
8. The prime objective of the capital market regulation includes one of the following.
(a) ensuring unfair and inefficient financial system (b) increase of systemic risk (c) protection of
investor (d) ensuring that marketers are not fair
9. _ _ _ are the share holders that are entitled to the totality of the profit after all other share
holders have been paid
(a) ordinary shares (b) reference shares (c) common shares (d) uncommon shares
10. Ordinary shares can split into two namely _ _ _ and _ _ _
(a) referred and preferred ordinary shares (b) preferred and deferred ordinary shares (c)
proffered and referred ordinary shares (d) proffered and deferred ordinary shares
11. They share dividend after preferred ordinary shares holders have been paid, the types of
share holders are referred to as
(a) proffered ordinary shares (b) preferred ordinary shares (c) deferred ordinary shares (d)
referred ordinary shares
12. They are entitled to a fixed rate of dividend before any other class of shares , these class of
share holders are referred to as
(a) ordinary shares (b) referred shares (c) proffered shares (d) preference shares
13. Shares can issued on the following terms except _ _ _
(a) shares issued at a discount (b) shares issued at a par shares issued at a premium (d) shares
issued at a pro
14. _ _ _ means that the shares are quoted below the nominal value.
(a) shares issued at a discount (b) shares issued at a pro (c) shares issued at a pre (d) shares
issued at a per
15. One of the following is a method of collecting money when shares are issued out
(a) payable in half on application (b) payable by installment (c) payable by per (d) payable by
pro
16. Shares are issued at a premium when the issuing value is _ _ _
(a) less than the nominal value (b) qual to the nominal value (c) more than the nominal value
(d) added to the nominal value
17. _ _ _ means that the nominal value price is equal to the issuing price.
(a) shares issued at a pro (b) shares issued at a pre (c) shares issued at a discount (d) shares
issued at a par
18. _ _ _ are entitle to a fixed rate of dividend after payment of dividend to preference
shareholders
(a) preferred ordinary shares (b) ordinary shares (c) proffered ordinary shares (d) referred
ordinary shares
19. What is the premium if shares of 2 Naira nominal value was issued at 5 Naira
(a) 7 Naira (b) 3 Naira (c) 5 Naira (d) 2 Naira
20. A situation where shares of 2 Naira nominal value was issued at 2 Naira is refer to as _ _ _.
(a) shares issued at a premium (b) shares issued at a pro (c) shares issued at a par (d) shares
issued at a pre

SECTION ‘B’
Instruction: answer any two questions for this section.
1. With the aid of a diagram explain the financial system.
2. Explain the classes of shares and issues of shares.
3. State the objectives of capital market regulations in Nigeria.
4a. Define shares.
4b. List and explain the two methods of collecting money when shares are issued out.

SECTION ‘C’
Instruction: attempt all questions in this section.

1. On 1st January, 2022 Habib limited makes an issue of N13,000 ordinary shares of nominal
value of N2 at N3. Application and the money were received for exactly N13,000 shares. Show
the entries in the journal and ledger.
Notes:
On receipts of application money :
Debit: Bank Account
Credit: Application Account
On allotment:
Debit: Application Account
Credit: Shares Premium Account
Debit: Ordinary Share Capital Account
In this situation shares are issued at premium.

2. On the 31st June, 2023 Sani limited makes an issues of N15,000 ordinary shares of N2 each
at a par. Application together with total amount are received for exactly N15,000 shares and
shares were allotted to the applicants. Show the journal entries and ledgers.
Additional informations were as follows:
I. Here, the shares will be issued at par and will be paid in full on application.
II. On receipts of application money: debit bank a/c and credit application a/c.
III. On allotment: credit ordinary shares capital a/c and debit application a/c.