Day: May 11, 2022

A company issued £1 ordinary shares for £1.20 each. The total proceeds were recorded in the ordinary share capital account.

Which journal entry completes the entries for the share issue?

Select ONE answer:

1. debit – suspense / credit – ordinary share capital
2. debit – ordinary share capital / credit – suspense
3. debit – ordinary share capital / credit – share premium
4. debit – share premium / credit – ordinary share capital

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 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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