Accounting Multiple Choice Question – 14 January 2023

Which statement is correct?

Select ONE answer:

1. A bonus issue of shares will increase the amount of cash available to the company.
2. A rights issue of shares is always made at the nominal value of the shares.
3. A rights issue of shares will increase the amount of cash available to the company.
4. If shares are issued at an amount that is more than the nominal value of the shares, the excess must be debited to the share premium account.

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

This work is licensed under a Creative Commons Attribution 4.0 International License.