A company issued ordinary shares at their nominal (par) value and received payment in full.
The effect of this on the company’s financial statements is . . .?
Select ONE answer:
- the bank balance is increased and the figure shown in the balance sheet for ordinary share capital is increased.
- the bank balance is decreased and the figure shown in the balance sheet for ordinary share capital is decreased.
- the bank balance is increased and the figure shown in the balance sheet for ordinary share capital is decreased.
- None of the above.
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 1
- Correct – Money has been received – so the bank balance is increased. Shares have been issued – so the company’s share capital has been increased.
- Not correct
- Not correct
- Not correct
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